New Delhi, June 3 (IANS). According to HSBC India Services PMI data released on Wednesday, strong growth in new business was recorded due to increased demand for freight, digital services, e-commerce, entertainment and IT services, due to which the Purchasing Managers’ Index (PMI) of India’s service sector increased to 59.8 in May from 58.8 in April.
Due to increase in new orders, companies intensified their business activities. Along with this, service sector companies also continued to increase the number of employees, due to which there was an increase in employment opportunities.
Cost pressures in India’s services sector still remain at historically high levels, but eased in May to the lowest level in the last four months, according to the PMI report.
This required companies to make only limited increases in the prices of their services. The pace of price rise in May was the slowest since January.
HSBC Chief India Economist Pranjul Bhandari said business activity in India’s services sector continued to expand in May, supported by a steady increase in new business.
He said that the external demand for services provided from India also increased. After the decline in April, there was a good recovery in the demand for export-oriented services.
Bhandari said that due to reduction in inflation in input costs, the pressure on companies to increase prices has also reduced.
New orders received by Indian service providers during the first quarter of the financial year recorded the fastest growth in the last six months. Due to this, the slowness seen in March was further left behind.
Indian service companies also received more orders from foreign markets. However, growth in international orders remained slightly lower than total sales and below the 2025 average level.
Yet foreign demand remained strong. Companies reported that they received more business from Australia, Canada, France, Germany, Hong Kong, Malaysia, United Arab Emirates (UAE) and United Kingdom (UK).
The report said that despite the rise in prices of services, demand for Indian services remained strong. However, the rate of tariff increase fell to a four-month low and remained close to its long-term average.
Indian service sector companies continued the process of increasing the number of employees in May. The pace of job creation remained strong and was the second fastest growth in the last almost a year. A better performance than this was recorded only in April.
However, less than 7 percent of the companies surveyed talked about increasing the recruitment of new employees, while most of the companies did not make any change in their number of employees.
–IANS
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