India’s services Purchasing Managers’ Index (PMI) rose to 58.5 in October, from a ten-month low of 57.7 in September, according to the monthly report released by HSBC and compiled by S&P Global.
The rise in HSBC India’s seasonally adjusted services business activity index was attributed to strong sales channels and higher demand, leading to higher levels of business activity.
Pranjul Bhandari, chief India economist at HSBC, said: “India’s services PMI recovered from its ten-month low in September to 58.5 in October. “During October, India’s services sector saw strong expansion in output and consumer demand, and job creation also rose to a 26-month high.”
However, the report also noted that input price inflation increased, mainly due to food and wage costs. Despite this, the general inflation rate remained below the long-term average.
India’s service economy also saw an increase in export sales in October. According to respondents, strong demand from customers in Africa, Asia, the United States, the Middle East and the United Kingdom contributed to this.
Additionally, input price inflation for service businesses hit a three-month high in October, driven primarily by increases in food and wage costs. However, this inflation generally remained below the long-term average.
Business sentiment remained positive due to healthy demand trends and new customer inquiries.
Additionally, the HSBC India Composite Manufacturing Index also rose to 59.1 from a 10-month low of 58.3 in September, as new business entries surged in the manufacturing and services sectors, leading to a growth in sales and employment.
Service sector employment grew significantly in October, the fastest in 26 months. According to the report, about 13 percent of panelists reported job creation, compared to 9 percent in September.
The PMI survey covers more than 400 industries, and a PMI reading above 50 indicates expansion and a score below 50 indicates contraction.
