New Delhi, Feb 5 There was a sharp expansion in India's services business activity during January this year, although the growth rate was slower than December, according to the HSBC India PMI survey released on Wednesday.
Several services companies linked output growth to favourable demand conditions, new business wins and investment in technology. However, a few firms suggested that activity levels at their units were constrained by a fall in customer numbers, the survey states.
At 56.5 in January, the seasonally adjusted HSBC India Services PMI Business Activity Index indicated a sharp rate of expansion. However, the headline figure was down from 59.3 in December, the survey stated.
But the rate of job creation accelerated from December and was among the fastest seen since data collection started in December 2005, it pointed out.
Overall, new business continued to increase strongly. The rise was attributed to strong demand and decisions to offer better prices than rivals. Growth was reportedly curbed by intense competition.
In contrast to the trend for total new orders, there was a quicker increase in international sales. Survey participants noted gains from clients in Asia, Europe, the Middle East, and the Americas, according to the survey.
Service providers in India were confident of a rise in business activity over the course of the coming 12 months. Qualitative data showed that advertising, efforts to price competitively, and new client enquiries were some of the reasons listed for upbeat forecasts. The level of positive sentiment did fall to a three-month low, but was broadly aligned with the series trend.
Ongoing improvements in new business intakes and rising capacity pressures prompted service providers to recruit additional staff at the start of the last fiscal quarter.
The rate of inflation was little changed from that seen around the turn of the year, therefore remaining above its long-run average. As a result of rising cost burdens and demand resilience, prices charged for the provision of Indian services increased further at the start of 2025. Having accelerated from December, the rate of charge inflation was marked and above its trend, the survey added.
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