India's Services Sector Surges: PMI Hits Two-Month High

India's services sector experienced robust growth in January, with the Services PMI hitting a two-month high of 58.5 and the Composite PMI rising to 58.4. Main drivers included domestic market strength, new business gains, and increased hiring, supported by improved demand conditions across manufacturing and services.

India's services sector activity demonstrated significant growth in January, reaching a two-month peak with the Services Purchasing Managers' Index (PMI) increasing to 58.5, as reported by HSBC. This rise marks a promising expansion from December's 58.0, confirming a historically sharp growth rate, according to the data.

HSBC attributed the strengthened performance to a robust domestic market, which remained a primary driver of new business. While domestic orders surged, international orders also saw substantial growth. The latest figures reflect the highest rate of overall expansion in three months, with a steady influx of new orders bolstering output growth.

The report highlighted a recovery in growth for service providers nationwide, spurred by accelerated new business intakes and improved output. Companies expressed increased optimism about future prospects, prompting a rise in hiring. Prices saw a quicker increase, although gains remained moderate.

The HSBC India Composite PMI Output Index also showed an upward momentum, moving from an 11-month low of 57.8 in December to 58.4 in January. This suggests a vigorous expansion supported by enhanced demand in manufacturing and services, driving sales Higher new order rates fueled by client interest and better online visibility were noted as crucial contributors.

Segment analysis revealed that Finance and Insurance led growth in both output and new orders, despite some slowdowns. Higher costs for products like eggs and electronics were reported by service firms. Input costs rose at their fastest since last September but stayed moderate overall.

Outstanding business levels in the services sector remained largely stable, with the index for pending workloads edging just above the neutral mark. This stability bodes well for ongoing growth and expansion across India's service industries. (ANI)

(With inputs from agencies.)