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Informist, Wednesday, Feb. 5, 2025

 

--India Jan services PMI 56.5 vs 59.3 in Dec 
--India Jan composite PMI 57.7 vs 59.2 in Dec 
--India Jan services PMI of 56.5 lowest in 26 months 
--India Jan composite PMI of 57.7 lowest in 14 months

 

NEW DELHI – Activity across India's services sector grew at the slowest pace in 26 months in January, with the HSBC India Services Purchasing Managers' Index declining to 56.5 from 59.3 in December, S&P Global said Wednesday. New business orders rose at the slowest pace since November 2023, curbing the upturn in business activity, S&P Global said.

 

The final number for January is lower than the provisional estimate, with the flash PMI released on Jan. 24 pegging last month's services print at 56.8. A PMI reading of more than 50 denotes expansion in activity from the previous month, while a print below 50 is indicative of contraction.

 

While several companies said that demand conditions were favourable, a few said that activity levels were constrained by a fall in customer numbers, S&P Global said. Growth in business activity was reportedly curbed by intense competition. International sales rose at a five-month high in January with survey participants noting gains from Asia, Europe, West Asia, and the Americas.

 

Cost burdens last month increased broadly at the same pace as in December, with firms largely reporting higher staff costs and increased food prices. "As a result of rising cost burdens and demand resilience, prices charged for the provision of Indian services increased further at the start of 2025," S&P Global said.

 

Service sector firms hired additional staff at the start of the year. The rate of job creation was among the fastest seen since data collection started in December 2005.

 

Data released on Monday showed India's manufacturing PMI started 2025 at a six-month high of 57.7. However, the fall in the services index has pulled down the composite PMI for January to a 14-month low of 57.7 from 59.2 in December, S&P Global.

 

The fall in service sector activity in January would raise alarm for policymakers, especially the Reserve Bank of India's Monetary Policy Committee, whose three-day meeting to decide interest rates began on Wednesday. The rate-setting panel is widely expected to lower the repo rate by 25 basis points to 6.25% on Friday.  End

 

Reported by Shubham Rana

Edited by Ashish Shirke

 

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