India’s services sector activity expanded at slowest pace in
the month of January, as new business intakes rose at the slowest pace since
November 2023, curbing the upturn in business activity. As for prices, cost
burdens increased to broadly the same extent as in December, with firms largely
reporting greater payroll expenses. Besides, charge inflation also ticked
higher.
According to the survey report, the seasonally adjusted HSBC
India Services PMI Business Activity Index eased to 56.5 in January from 59.3
in December. Further, the HSBC India Composite PMI Output Index -- which
measures both manufacturing and services -- also fell to 57.7 in January as
against 59.2 in December.
The report noted that ongoing improvements in new business
intakes and rising capacity pressures prompted service providers to recruit
additional staff at the start of the last fiscal quarter. The rate of job
creation accelerated from December and was among the fastest seen since data
collection started in December 2005.
Service providers in India were confident of a rise in business activity over the course of the coming 12 months. Advertising, efforts to price competitively and new client enquiries were some of the reasons for upbeat forecasts. The level of positive sentiment did fall to a three-month low, but was broadly aligned with the series trend.
Source: Ace Equity
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