Informist, Wednesday, Jul 3, 2024

--India Jun services PMI 60.5 vs 60.2 in May

--India Jun composite PMI 60.9 vs 60.5 in May

NEW DELHI – India's services sector activity picked up in June, with the HSBC India services Purchasing Managers' Index, compiled by S&P Global, rising to 60.5 from a five-month low of 60.2 in May. Output of the services sector rose because of a strong rise in new orders and an "unprecedented expansion in international sales", S&P Global said.

The final reading of services PMI was higher than the flash services PMI print of 60.4 released on Jun 21. A reading above 50 denotes expansion in activity, while a print below 50 indicates contraction.

The composite Purchasing Managers' Index, which is the weighted average of the manufacturing and services indices, rose to 60.9 in June from a five-month low of 60.5 in May. Data released on Monday showed India's manufacturing Purchasing Managers' Index rose to 58.3 last month from a three-month low of 57.5 in May.

"Demand strength and rising intakes of new business were cited as the key determinants of growth," S&P Global said. "Supporting the upturn in total new business was a record expansion in international orders. Asia, Australia, Europe, Latin America, the Middle East and the US were all cited as sources of new work from abroad."

In order to keep up with the rise in new orders last month, firms hired short-term and permanent staff at the fastest pace since August 2022. The rise in staffing added to the firms' expenses in June. Along with labour costs, expenses of services sector firms rose because of higher food and fuel costs. However, the pace of inflation was the weakest in four months.

Subsequently, selling prices also rose at the slowest pace since February, S&P Global said. Less than 5% of services companies passed on the additional costs to their clients by lifting selling prices in June, which led to a moderate rate of charge inflation last month, S&P Global said.

"Overall, service providers remain confident about the year-ahead business outlook, although the level of optimism moderated sharply during the month," Pranjul Bhandari, chief India economist at HSBC, said in the release. "The composite PMI also accelerated in June, supported by greater inflows of new orders. Manufacturing firms contributed more to the expansion than services firms." End

Reported by Shubham Rana

Edited by Avishek Dutta

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