NEW DELHI: Strong demand from both international and domestic markets spurred services sector activity to a three-month high in December, according to a private survey released Friday.
The HSBC India Services Purchasing Managers’ Index ended 2023 at 59, higher than the previous month’s reading of 56.9, as per the survey conducted by S&P Global. PMI above 50 indicates expansion in activity.
The latest reading also raises optimism about the year ahead.
“India’s services sector ended the year on a high note, with an uptick in business activity, led by a three-month high new orders index,” said Pranjul Bhandari, chief India economist, HSBC.
The 400 service sector firms covered in the survey expect strong demand to fuel growth in the new year.
“Services firms in India expect the strong demand momentum to carry forward to 2024 which, coupled with advertising and better customer relationships, underpinned upbeat forecasts for output,” said an HSBC press release.
India’s service sector performance, according to official GDP numbers, was dull compared with manufacturing in the second quarter of fiscal 2024, with financial services rising 6% and trade, hotels, transport and communications recording 4.3% growth. The Indian economy expanded 7.7% in the first half of the year and is likely to record 6.3% growth in the second half, as per Reserve Bank of India estimates.
While firms noted that the increase in new business orders in December was supported by international sales, with demand rising from Australia, Canada, Europe, the Middle East and South America, the expansion rate in new export orders was the lowest since June.
Service exports have been strong throughout the year.
There was good news on the employment front as well, as companies recorded a faster pace of jobs growth in the service sector in December compared with the previous month.
Source: The Economic Times
