New businesses drive services sector growth to 10-month high in June: PMI

Business Standard

a day ago

Indian service providers ended the first fiscal quarter on strong footing as output and new order intakes rose at the fastest rates since August 2024 in June, aided by another robust expansion in international sales and job creation, said a private survey on Thursday.
The HSBC India services purchasing managers' index (PMI), compiled by S&P Global, stood at 60.4 in June, up from 58.8 in May. The index has been above the neutral 50 mark, which separates contraction from expansion, for 47 consecutive months.
'Monitored companies linked the upturn to positive demand trends and ongoing improvements in sales. Services companies benefited most from the continued strength of the domestic market, alongside a marked increase in new export business," said the survey.
The survey noted that overseas demand particularly improved from the Asian, Middle Eastern, and US markets, according to panel members. The level of incoming new export orders rose at the slowest pace in three months halfway through the 2025 calendar year, albeit one that was among the strongest seen since this question entered the questionnaire in September 2014.
'New export orders also expanded, albeit at a softer pace. Margins improved, as the rise in input costs was below that seen for output charges. Service providers remained optimistic about future growth, though their confidence faded a tad,' she added.
Sector data indicated that expansions in output and new orders remained broad-based during June. Once again, finance and insurance topped the growth rankings. For both measures, the slowest expansions were in real estate and business services.
On the employment front, the survey noted that the ongoing expansion of the Indian service sector had a positive impact on recruitment, as employment rose for the thirty-seventh consecutive month in June, with the rate of job growth outpacing its long-run average despite slowing from May's record.
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. Where expenses increased, panel members commonly cited greater staff salaries and wages. Several service providers noted that they had maintained sufficient pricing power to pass on higher costs to clients. Despite easing from May, the rate of charge inflation remained above the series trend.
Cost pressures were most intense in the consumer services category, while the fastest upturn in output charges was noted in the finance and insurance segment.
Month PMI Services
June 60.5
July 60.3
August 60.9
September 57.7
October 58.5
November 58.4
December 59.3
January 2025 56.5
February 59
March 58.5
April 58.7
May 58.8
June 60.4
Source: HSBC