India’s services sector rebounded in October, with growth accelerating after dipping to a 10-month low in September, driven by a surge in demand. According to a private business survey conducted by HSBC and compiled by S&P Global, the headline Purchasing Managers’ Index (PMI) increased to 58.5 in October from 57.7 in September. The index has remained above the neutral 50-mark, indicating expansion, for 39 consecutive months. The survey noted robust domestic and international customer demand. New export sales are rising across India’s service economy, driven by clients from Africa, Asia, the Americas, the Middle East, and the United Kingdom.
The services sector also saw improved job creation, with companies hiring at the highest rate in over two years. Around 13% of respondents reported job creation, up from 9% in September, as sustained business growth prompted firms to recruit full- and part-time workers. However, input costs rose faster in three months, mainly due to higher wages and food costs passed on to clients. Despite this, the overall inflation rate remained below the long-term average. Consumer services reported the highest cost pressures. Chief India Economist at HSBC, Ms. Pranjul Bhandari, highlighted strong output and consumer demand expansion, with job creation hitting a 26-month high. Although input price inflation is rising due to increased wage and food costs, business sentiment remains positive, with expectations for future services sector activities largely optimistic.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
