New Delhi [India], November 6 : India's services sector witnessed a robust performance in October, as the Service PMI index surged to 58.5, up from a ten-month low of 57.7 in September, according to HSBC India Service PMI compiled by S&P Global.
This increase reflects a sharp and accelerated rate of growth in the sector, surpassing its long-run average of 54.1.
HSBC noted, "Rising from 57.7 in September to 58.5 in October, the headline figure was consistent with a sharp and accelerated rate of growth that outpaced its long-run average."
The index highlights that strong sales pipelines, along with high demand, contributed significantly to the expansion in business activity, marking October as a month of notable recovery for India's services economy.
One of the report's key findings was the sharp expansion in services employment, which grew at the fastest rate in 26 months.
The report attributed this increase in hiring to positive sales developments and optimism among businesses regarding near-term growth. Firms added new employees at the highest rate in over two years, driven by expectations of sustained demand.
As per report, October also saw a rise in input costs, which grew at their fastest pace in three months, reflecting increased demand and economic activity.
Despite the rise in costs, strong sales growth remained a dominant theme, with businesses experiencing a historically elevated rate of sales expansion that was markedly improved from September's slower pace.
The report pointed out that new export sales also showed promising growth across India's services sector. Survey respondents credited this increase to growing demand from international clients, with notable contributions from Africa, Asia, the Americas, the Middle East, and the UK.
This recovery in exports indicates that India's services sector is benefitting from strengthening global demand, as well as domestic resilience.
"India's services PMI recovered from its ten-month low in September to reach 58.5 last month. During October, the Indian services sector experienced strong expansions in output and consumer demand, as well as job creation, which achieved a 26-month high" said Pranjul Bhandari, Chief India Economist at HSBC.
Overall, the October PMI results indicate strong momentum in India's service sector, underscored by high consumer demand, rising employment, and increased exports. The service sector's performance adds to broader signs of economic health in India, with businesses optimistic about future growth even as they face cost pressures.
With robust domestic and international demand, the sector is well-positioned for continued expansion in the months ahead.
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