Services PMI
grows, employment increases at the fastest rate in seven months! India’s services industry showed faster growth in March, driven by strong demand, as per a private survey. The
HSBC India Services Purchasing Managers’ Index
, compiled by S&P Global, increased to 61.2 last month, surpassing expectations. This marks the 32nd consecutive month of growth.
Job creation surged at the quickest rate in seven months, while
exports
experienced unprecedented growth.
Economist Ines Lam noted that India’s services PMI rose in March, fueled by robust demand leading to increased sales and business activity. New business thrived due to domestic demand, with exports surging at the highest rate since 2014.
As a result, firms ramped up hiring at the quickest pace in seven months, a positive sign for the workforce. Despite a slight dip in future activity, optimism prevails, although concerns about competitive pressures linger.
The upcoming year holds a positive outlook, despite a recent decline in the future activity sub-index to a four-month low due to concerns over competitive pressures.
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Rising input costs, combined with strong demand, prompted firms to increase prices charged to clients, resulting in the strongest rate of price growth since July 2017.
Input costs rose more quickly, but service providers managed to maintain margins by increasing output prices, Lam added.
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These higher prices may lead the Reserve Bank of India to maintain its repo rate at 6.50% for an extended period.
With services activity expanding at a faster pace and the manufacturing sector growing at its quickest rate in 16 years in March, the HSBC final India Composite PMI Index reached an eight-month high of 61.8, surpassing the previous month’s 60.6 and exceeding a preliminary reading of 61.3.