India’s services sector activity surges to 10-month high in June

New Delhi, July 3
The growth in India's services sector activity surged to a 10-month high in June, driven by robust demand in both the domestic and export markets, according to an HSBC survey released on Thursday.

The seasonally adjusted HSBC India Services PMI Business Activity Index, compiled by S&P Global, rose from 58.8 in May to 60.4 in June. The PMI threshold of 50.0 is neutral mark that separates growth from contraction on the index.

New orders expanded at the quickest rate since August 2024. Services companies benefited most from the continued strength of the domestic market, alongside a marked increase in new export business. Overseas demand particularly improved from the Asian, Middle Eastern and US markets, according to panel members, the survey states.

The ongoing expansion of the Indian services sector had a positive impact on recruitment. Employment rose for the thirty-seventh consecutive month in June, with the rate of job growth outpacing its long-run average, although it was lower than the record figure achieved in May.

The rate of input cost inflation across India's service economy eased to a ten-month low in June, and was below its long-run average. Despite easing from May, the rate of charge inflation remained above the series trend. Outstanding business expanded at a slight rate that was nevertheless faster than in May.

According to the survey, optimism regarding the outlook for output levels in one-year time was sustained, with 18 per cent of service providers forecasting growth. This proportion of upbeat firms was, however, the lowest since mid-2022. Hence, the overall level of confidence fell and was below its long-run average.

The HSBC India Composite PMI, which combines services and manufacturing activity, rose to 61.0 in June from 59.3, marking the fastest expansion in 14 months. The manufacturing PMI data released this week showed manufacturing activity growth accelerated in June, in tune with the strong services sector performance.