Indian service sector growth hits 11-month high, growth attributed to overall sales: July PMI at 60.5
India's services sector surged to an 11-month high in July, with the HSBC PMI reaching 60.5. Strong growth was driven by increased new export orders and overall sales. Service providers reported higher demand from various regions, including Asia, Canada, Europe, the UAE, and the US. This positive news comes ahead of the RBI's MPC meeting.
New Delhi: The Indian services sector saw an increase in the month of July, where it touched an 11-month high, attributing its growth to the new export orders and sharp rise in overall sales, said a monthly HSBC PMI (Purchasing Manager Index) Survey on Tuesday, July 5.
The HSBC India PMI Business Activity Index, colloquially known as the HSBC PMI Index, was at 60.5 in the month of July. The July month data was a little higher, i.e., 0.1, than the month of June. The recorded June Index was 60.4. The July data showed the rate of expansion, and it was the best seen since August 2024.
In the Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
HSBC PMI Index
"At 60.5, the services PMI indicated a strong growth momentum, led by a pick-up in new export orders," Pranjul Bhandari, Chief India Economist at HSBC, was quoted by PTI.
Sustained orders in new business activity were the main driver behind this output growth, said the survey. The survey further said that service providers of India appreciated the better improvement in international demand for their services. "They reportedly secured new work from Asia, Canada, Europe, the UAE, and the US," it said.
Continuing with that, service providers were hopeful for the better output that is expected to come in the year ahead. The factors that are currently playing a crucial role in an enhanced business are better output, efficiency gains, robust marketing, tech and innovation, and a growing online presence, said the survey, quoting the service providers.
On the pricing front, input costs and output charges rose at faster rates than in June. "The solid rise in output prices reflected greater cost burdens and demand strength," the survey said.
RBI MPC Meeting
The survey came amidst the backdrop of the RBI Governor' MPC (monetary policy committee) meeting, where the three-day deliberations are ongoing to decide the next bi-monthly monetary policy and amid the expectation of a pause in rate cuts.
The MPC is set to announce its decisions on Wednesday, August 6.
The HSBC India Services PMI is prepared by S&P Global. The survey comes from the responses to questionnaires that were sent to around 400 service sector companies.