Synopsis
In January 2023, India's services sector experienced a notable growth, albeit at a slower rate than December. The HSBC India PMI survey highlighted an upturn in business activities and employment, driven by favorable demand and competitive pricing, despite some challenges from reduced customer numbers and intense competition.Key Takeaways
- Significant growth in services sector activity.
- Job creation accelerated, nearing record levels.
- International sales increased, especially from Asia and Europe.
- Businesses remain optimistic about future growth.
- Inflation rates for services remain elevated.
New Delhi, Feb 5 (NationPress): India's services sector witnessed a notable expansion in business activities during January this year, although the pace of growth was slower compared to December, as per the HSBC India PMI survey released on Wednesday.
Many service-oriented companies attributed the growth in output to favorable demand conditions, new business acquisitions, and investments in technology. However, some firms indicated that their operations were affected by a decrease in customer numbers, as highlighted in the survey.
The seasonally adjusted HSBC India Services PMI Business Activity Index stood at 56.5 in January, reflecting a significant expansion rate. Nevertheless, this figure was down from 59.3 in December, according to the survey.
The pace of job creation, however, accelerated from December and was among the fastest recorded since the start of data collection in December 2005.
Overall, there was a strong increase in new business, attributed to robust demand and strategic pricing that outperformed competitors. However, growth faced challenges due to intense competition.
In contrast to the overall trend for new orders, there was a quicker rise in international sales, with survey respondents noting gains from clients in Asia, Europe, the Middle East, and the Americas.
Indian service providers expressed optimism regarding a rise in business activity over the next 12 months. Factors such as advertising, competitive pricing efforts, and new client inquiries were cited as reasons for this positive outlook. Although the level of optimism dipped to a three-month low, it remained generally consistent with overall trends.
The continuous improvements in new business intake and increasing capacity pressures prompted service providers to hire more staff at the beginning of the last fiscal quarter.
The inflation rate remained relatively unchanged from the start of the year, staying above its long-term average. Due to rising cost pressures and resilient demand, the prices for Indian services saw an increase at the beginning of 2025. The rate of charge inflation accelerated from December, remaining significantly above its trend, as indicated by the survey.
