India's services PMI rises to 59.8 in May over new business growth
New Delhi, June 3
India's services PMI rose to 59.8 in May, from 58.8 in April, amid strengthening demand for freight, digital solutions, e-commerce, entertainment and IT, which boosted new business growth, the HSBC India Services PMI data showed on Wednesday.
As a result, companies lifted activity to a greater extent and continued to add to payroll numbers.
Although cost pressures remained historically high across India's service economy, they receded to their lowest in four months, which supported a moderate increase in selling prices that was the softest since January, showed the PMI data.
"India's services PMI signalled an expansion in business activity in May, supported by a continued rise in new business. External demand for India-provided services also grew at a faster pace, rebounding after a sharp decline in April. Input cost inflation eased, which, in turn, reduced pressure on selling prices," explained Pranjul Bhandari, Chief India Economist at HSBC.
New orders placed with Indian service providers rose to the greatest degree in six months halfway through the first fiscal quarter, moving further away from the slowdown seen in March.
New export business also rose, albeit it did so to a lesser extent than total sales and that seen on average during the 2025 calendar year. The expansion in international orders was nevertheless solid, with firms citing gains from Australia, Canada, France, Germany, Hong Kong, Malaysia, the UAE and the UK, the PMI data showed.
Demand for Indian services improved despite another increase in selling prices. The rate of charge inflation eased to a four-month low, however, and broadly matched its long-run average, it added.
The Indian services companies signalled a further increase in payroll numbers. The overall rate of job creation was solid and the second-fastest in just under a year (behind April), but fewer than 7 per cent of panellists signalled greater hiring and the vast majority indicated no change in headcounts.
— IANS
Reader Comments
While the headline number looks good, I'm concerned about the cost pressures mentioned. "Historically high" costs are still a burden for small service businesses like ours. The price hike they mention might be moderate, but for consumers like us, everything seems to be getting more expensive every month. Hope this translates into real wage growth for workers.
Impressive growth numbers from India! The rebound in external demand after April's decline shows that global confidence in Indian services remains strong. Would be interesting to see which subsectors are driving this - e-commerce and IT make sense given digital transformation trends. Keep it up! 👍
Positive news indeed, but let's not get carried away. The article says new orders rose to "the greatest degree in six months," which is good, but it also mentions the vast majority of firms didn't change headcounts. So the job creation narrative is a bit overblown. We need more inclusive growth that reaches smaller cities and towns, not just metro-based services firms benefiting from this boom.
Great data! The diversification of export destinations (Australia, Canada, France, Germany, UAE, etc.) shows India's services sector is becoming globally competitive beyond just IT. This resilience despite global headwinds is impressive. Hope this continues through the fiscal year. 💪
Another month, another PMI milestone! But I can't help wondering - when will these numbers reflect in reduced inflation for the common person? The article mentions "selling prices increased" even if at a slower pace. My household budget feels the pinch every month. Good for the economy, but hope the benefits trickle down faster to ordinary families like ours. 🏠
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