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Informist, Wednesday, Jun. 4, 2025

 

--India May services PMI 58.8 vs 58.7 in April 

--India May composite PMI 59.3 vs 59.7 in April 

 

MUMBAI – India's services sector activity remained largely steady in May compared to the previous month, with the HSBC India Services Purchasing Managers' Index edging up to a three-month high of 58.8 last month from 58.7 in April, S&P Global Wednesday said. Meanwhile, composite PMI moderated to a three-month low of 59.3 in May from an eight-month high of 59.7 in April.

 

The final services PMI print of 58.8 for May is sharply lower than the flash estimate of 61.2 released on May 22, while the composite index is also below the preliminary figure of 61.2. A PMI reading of more than 50 denotes expansion in activity from the previous month, while a print below 50 indicates contraction.

 

"A key area of strength was exports, with survey participants reporting one of the strongest improvements in international demand in 19-and-a-half years of data collection," S&P Global said. "The latest results also revealed a fresh record-rise in employment, as firms continued to adjust operating capacities in line with ongoing increases in sales."

 

Price pressures intensified in May because of an increase in workforce and overtime payments, S&P Global said. The overall rate of input cost inflation edged above the series average and was the highest since January, S&P Global said. "Likewise, services charges in India rose to a greater degree halfway through the first fiscal quarter. The rate of inflation was the joint-strongest since November 2024 and historically marked."

 

The rise in inflation should give the Reserve Bank of India's Monetary Policy Committee greater confidence to lower interest rates on Friday. The MPC is widely expected to cut the repo rate by 25 basis points to 5.75% on Friday, following up on the 50 bps of rate cuts already seen this year. 

 

Business sentiment recovered last month, with the overall level of confidence rising from April's 23-month low. "Upgraded forecasts stemmed from expectations that greater staffing capacity, expanded clientele and marketing initiatives will support activity growth in the year ahead," S&P Global said.  End

 

Reported by Shubham Rana

Edited by Deepshikha Bhardwaj

 

 

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