India's April services growth edges up; confidence falls to two-year low, PMI shows
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India's services sector growth picked up slightly in April after March's slowdown as demand expanded robustly, although optimism was its weakest in nearly two years, a survey showed on Tuesday.The HSBC India Services Purchasing Managers' Index (PMI), compiled by S&P Global, rose marginally to 58.7 in April from 58.5 in March, lower than a preliminary estimate of 59.1.PMI readings above 50.0 indicate growth in activity, while those below that level point to a contraction.New business volumes - a key gauge of demand - increased sharply in April, as it did in the previous two months. International demand strengthened considerably, with export orders expanding at the fastest rate since July 2024.Finance and insurance emerged as the strongest-performing sub-sector, recording the highest growth rates for both output and new orders.To meet rising client demand, service providers boosted their workforce numbers for a 35th straight month. The rate of job creation accelerated from March and exceeded the long-term average."New export orders gained momentum after taking a breather in March, accelerating at its fastest pace since July 2024. Margins improved as cost pressures eased and prices charged rose at a faster pace," said Pranjul Bhandari, chief India economist at HSBC.On the price front, input cost inflation eased to its lowest in six months. Companies took advantage of strong demand conditions to pass on costs, raising their selling prices at a quicker pace than in March.Easing price pressures have given the Reserve Bank of India room to lower its key repo rate by 50 basis points this year with a few more cuts expected in the next few months.Still, business sentiment fell for a fifth consecutive month, and is now at its lowest level since mid-2023, with increasing competition dampening optimism.The HSBC India Composite PMI , which includes both manufacturing and services, rose to 59.7 in April from 59.5 in March, marking the strongest expansion in private sector activity since August.
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