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India's Services PMI Hits 58.5 in Jan, Hiring Resumes on Strong Demand

India's services sector activity strengthened in January, with the HSBC Services PMI rising to a two-month high of 58.5. Growth was driven by robust demand, new business gains, and increased international orders from regions like Southeast Asia. This positive outlook prompted service providers to resume hiring after a pause. While input and output costs increased, the rate of inflation remained moderate by historical standards.

Key Points: India Services PMI Rises to 58.5, Hiring Resumes

  • PMI at two-month high of 58.5
  • New business and output expand quicker
  • Hiring resumes on robust outlook
  • Finance & Insurance leads growth
  • Input and output prices rise moderately
2 min read

India Services PMI rebounds to 58.5 in Jan, hiring resumes over robust outlook

India's services sector activity improved in January with PMI at 58.5. New orders and hiring grew on robust domestic and international demand.

"India's services PMI rose to 58.5 in January... signalling sustained momentum in the sector. - Pranjul Bhandari, HSBC"

New Delhi, Feb 4

The seasonally adjusted HSBC India Services PMI touched a two-month high of 58.5 in the month of January, from December's 58.0, noting quicker expansions in new business intakes and output, the S&P Global data showed on Wednesday.

Service providers in India welcomed a recovery in growth during January. They were also more upbeat towards the outlook and hired additional staff. On the price front, there were quicker albeit still moderate increases in input costs and selling charges.

The main features behind output growth were demand buoyancy, new business gains and tech investment, the report showed.

"India's services PMI rose to 58.5 in January, up from 58.0 in December, signalling sustained momentum in the sector. Robust output growth was driven by a steady influx of new orders, including increased international demand from South and Southeast Asia," said Pranjul Bhandari, Chief India Economist at HSBC.

Business confidence climbed to a three-month high, supported by efficiency gains, effective marketing, and the acquisition of new clients.

"While input and output prices are rising, they remain fairly mild by historical standards. The composite PMI also strengthened in January, reflecting solid demand growth across both manufacturing and services," Bhandari noted.

Survey participants remarked on new business gains from clients in Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand and Vietnam. Rising intakes of new work prompted service providers in India to resume hiring in January.

Granular data showed that Finance and Insurance topped the growth rankings for both output and new orders, despite being the only segment to post slowdowns since last December, said the report.

January data showed that the main source of new business gains was the domestic market, but international orders nevertheless rose solidly. Moreover, the pace of expansion was the most pronounced in three months, it added.

- IANS

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Reader Comments

R
Rohit P
Good to see hiring has resumed. The last few months were tough for the job market in services. International demand from so many countries is a positive sign for 'Make in India' for services. Let's keep this momentum going!
A
Aman W
While the numbers look good, I'm a bit concerned about the "quicker increases in input costs and selling charges" mentioned. As a small business owner, even moderate price rises squeeze our margins. Hope the demand remains robust enough to absorb this.
S
Sarah B
The geographic spread of new business is impressive – from Kenya to Vietnam. It shows Indian service providers are becoming globally competitive. Tech investment paying off!
K
Karthik V
Solid numbers. But I wish the report gave more details on which specific service sub-sectors, besides Finance, are driving this. Is it IT, tourism, consulting? The headline is good, but the devil is in the details.
N
Nisha Z
Business confidence at a 3-month high is the key takeaway for me. When companies are optimistic, they invest and hire. This positive sentiment cycle is crucial for sustained growth. Good start to the year!

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