India’s Services Purchasing Managers’ Index (PMI) for December 2024 increased to 59.3 points, up from 58.4 points in November, reflecting growth in the services sector. The rise was driven by strong demand, which supported new business inflows and output growth, prompting companies to expand their workforces. The finance and insurance sectors led this growth, registering the highest increase in new orders and business activity. The HSBC India Services PMI, compiled by S&P Global, reported the strongest expansion in four months, with underlying demand as the primary driver. New orders grew for the 41st consecutive month as companies expanded capacities to manage increasing workloads.
Cost pressures softened in December 2024 despite rising spending on food, labour, and materials. Inflation in selling prices also eased, though it remained above the long-term average. Consumer services firms faced the highest cost pressures, particularly in the transport, information, and communication sectors. The easing of input cost inflation helped improve business sentiment, with future activity and new business pointing to sustained growth in the near term. However, firms still faced increased backlog volumes, reaching a seven-month high highlighting ongoing capacity constraints. International orders grew, albeit at a slower pace. Meanwhile, India’s manufacturing PMI for December 2024 slipped to a 12-month low of 56.4, reflecting softer growth in production and new orders. The composite output index, combining services and manufacturing, rose to 59.2 from 58.6 in November. A PMI above 50 signals expansion, while below 50 indicates contraction.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.