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India’s services sector performed exceptionally well in January, as purchasing managers’ index (PMI) surged to six-month high at 61.8 against 59 in December. Job opportunities, too, recorded a rise last month.
Services has more than 53 per cent share in gross value added (GVA).
“New business expanded at a faster pace and managers’ expectation for future activity was strong. The new export business index accelerated, signalling that India’s services exports remained robust,” Ines Lam, Economist at HSBC said.
The PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies. The sectors covered include consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services.
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According to the report accompanying PMI with regards to the operating capacity of service providers, a further expansion in outstanding business volumes continued to support job creation in January. The latest rise in backlogs was slight and broadly in line with its trend, despite quickening to a five-month high.
“Employment also increased at a slight pace in January, albeit one that was the most pronounced in three months,” it said.
Data also showed a notable upturn in new export orders at Indian service providers in January, the strongest in three months. Monitored firms signalled gains from clients across the globe, including Afghanistan, Australia, Brazil, China, Europe, the UAE and the US. Business confidence improved further at the start of the final fiscal quarter, with services companies at their most upbeat since last September. Besides demand strength, firms expect investment and productivity gains to induce output growth in the year ahead, the report added.
On February 1, the agency released PMI data for manufacturing. It recovered from an 18-month low of 54.9 in December to 56.5 in January. Latest reading is four months. With improvement in both manufacturing and services sector, entire private sector is showing much improvement. Accordingly, the HSBC India Composite PMI Output Index rose to 61.2 in January from 58.5 in December to 61.2. This is the sharpest rise in six months. Service providers led the upturn, although both segments recorded faster rates of expansion in new business, the agency said.
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