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Informist, Tuesday, May 6, 2025

 

--India Apr services PMI 58.7 vs 58.5 in Mar

--India Apr composite PMI 59.7 vs 59.5 in Mar

 

NEW DELHI - India's services sector activity expanded at a slightly faster pace in April compared to March, with the HSBC India Services Purchasing Managers' Index edging up to 58.7 from 58.5, S&P Global said Tuesday. Meanwhile, the composite PMI rose to an eight-month high of 59.7 last month.

 

At 58.7, the final services PMI number for April is lower than the flash estimate of 59.1 released on Apr. 23, while the composite index is also similarly below the preliminary figure of 60.0. A PMI reading of more than 50 denotes expansion in activity from the previous month, while a print below 50 indicates contraction.

 

"New export orders gained momentum after taking a breather in March, accelerating at its fastest pace since July 2024. Margins improved as cost pressures eased and prices charged rose at a faster pace," Pranjul Bhandari, HSBC's chief India economist, said.

 

The rise in new export orders drove overall new business growth to its joint-best rate in eight months in April, with finance and insurance segments seeing the highest growth for both output and new orders, S&P Global said. Consequently, service providers added to their payrolls for the 35th month in a row, with the pace of job creation quicker in April than in the previous month. Despite an increase in the number of employees, service providers added to their unfinished work, with the order backlog rising at a faster rate than in March and above its long-term average.

 

In what will give the Reserve Bank of India greater confidence about its ability to keep cutting interest rates, input prices rose the least in six months in April. However, prices charged to customers increased more than in March, resulting in better margins. The Indian central bank has reduced the policy repo rate by 50 basis points so far in 2025, with economists widely predicting another 25 bps rate cut in June followed by another similar action in August as policymakers look to boost growth amid subdued inflation.

 

Despite the faster services sector growth, the overall level of business confidence in April was close to a two-year low. "Advertising, demand strength and productivity gains underpinned upbeat forecasts, which were nevertheless dampened by competition concerns," S&P Global said.  End

 

Reported by Siddharth Upasani

Edited by Tanima Banerjee

 

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