Data Alert
Dec services PMI rises to 4-month high of 59.3, inflation cools
This story was originally published at 11:22 IST on 6 January 2025
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--India Dec services PMI 59.3 vs 58.4 in Nov
--India Dec composite PMI 59.2 vs 58.6 in Nov
NEW DELHI - India's services sector activity expanded at the fastest pace in four months in December, with the HSBC India Services Purchasing Managers' Index rising to 59.3 from 58.4 in November, S&P Global said Monday. The final print for December, however, is lower than the provisional estimate, with the flash PMI released on Dec. 16 pegging last month's services print at 60.8.
A PMI reading of more than 50 denotes expansion in activity from the previous month, while a print below 50 is indicative of contraction.
"Forward-looking indicators such as new business and future activity suggested that the strong performance will likely continue in the near future. The easing of input price inflation in the month also supported business sentiment. Strength in the services PMI stands in contrast with the growing signs of a slowdown in the manufacturing industry," Ines Lam, economist at HSBC, said.
Data released last week showed India's manufacturing PMI ended 2024 at a 12-month low of 56.4, slightly lower than November's 56.5. However, the rise in the services index was enough to push the composite PMI for December to 59.2--also a four-month high--from 58.6 in November, S&P Global said Monday.
According to S&P Global, service providers said "buoyant underlying demand" explained the rise in services output in December, with new orders increasing for the 41st month in a row and by the most since August 2024. Firms expect output to increase over the next year even though the overall level of positive sentiment declined from November's six-month high. International orders, meanwhile, grew solidly, although they rose the least in three months.
In what will be a good news for policymakers, the faster growth in services sector output in December was accompanied by a decline in price pressures, with both input and output prices rising at a slower pace in December. Cost pressures were "by far strongest" at consumer services firms, S&P Global said. Meanwhile, customer prices rose most in the transport, information, and communication categories.
On the job front, while the number of hirings in December was lower than November's 19-month high, it was "sharp and among the strongest seen since data collection began in December 2005", S&P Global said. End
Reported by Siddharth Upasani
Edited by Akul Nishant Akhoury
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