PMI services rebound on renewed export orders

New Delhi:India’s services sector growth quickened in June from May’s five-month low, amid a stronger rise in new orders, record rise in export orders, and an unprecedented expansion in international sales, a monthly survey said on Wednesday.The strong demand also led to service providers hiring more staff with the pace of job creation touching a two-year high.

The seasonally adjusted HSBC India Services Business Activity Index rose from 60.2 in May to 60.5 in June, pointing to a sharp expansion in output. In the Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction. “Activity growth in India’s service sector accelerated in June, with the index rising by 0.3 ppt (percentage point) to 60.5, led by an increase in both domestic and international new orders. This encouraged services firms to increase their staffing levels at the fastest pace since August 2022,” said Pranjul Bhandari, Chief India Economist at HSBC.

Demand strength and rising intakes of new business were cited as the key determinants of growth. New orders received by Indian service providers continued to increase in June, extending the current sequence of expansion to nearly three years. There was also a record expansion in international orders. Asia, Australia, Europe, Latin America, the Middle East and the US were all cited as sources of new work from abroad.