India’s services PMI stands at 58.9 in Oct, firms confident of rise in business activity

New Delhi, Nov 6 India’s services Purchasing Managers' Index (PMI) stood at 58.9 in October as data still showed substantial, expansions in services output and new business, the data showed on Thursday.

The seasonally adjusted HSBC India Services PMI Business Activity Index was comfortably above both the neutral mark of 50.0 and its long-run average of 54.3.

While factors like demand buoyancy and GST (Goods and Services Tax) relief reportedly led to an improvement in operating conditions, competition and heavy rains constrained growth, the data showed.

Still, companies were strongly confident of a rise in business activity over the course of the coming 12 months, it added.

“The services PMI is still running well above the neutral level of 50.0 and its long-run average. Input costs notably increased at the slowest rate in 14 months, which provided some relief for firms,” said Pranjul Bhandari, Chief India Economist at HSBC.

New business intakes rose sharply, albeit to the least extent in five months. Nevertheless, they continued to cite positive demand trends and successful marketing.

“International demand for Indian services improved further, as signalled by another increase in external sales. The rate of expansion was solid, though the weakest since March,” the report mentioned.

Indian services companies looked to the future with optimism, forecasting growth of activity in tandem with expectations of demand strength. Advertising, greater client enquiries and plans to price competitively were also seen as opportunities to the outlook.

Earlier, India’s manufacturing sector growth surged in the month of October, fuelled by strong domestic demand, GST 2.0 reforms, productivity gains and increased technology investments.

The HSBC India Manufacturing Purchasing Managers' Index (PMI) rose to 59.2 in October from 57.7 in September, according to data compiled by US-based financial intelligence provider S&P Global.

The increase stemmed from quicker growth in new orders and factory output at the beginning of the third financial quarter, driven by boost in advertising and recent GST reforms.

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