India’s Services Index surges to 58.5 in October, employment growth hits 26-month high
India’s services sector witnessed a robust performance in October, with the Services PMI index climbing to 58.5, up from a ten-month low of 57.7 in September, according to HSBC India Service PMI compiled by S&P Global. This marks a sharp acceleration in business activity, outpacing the long-term average of 54.1.
The index highlights that strong sales pipelines, along with high demand, contributed significantly to the expansion in business activity, marking October as a month of notable recovery for India’s services economy.
The report attributed this increase in hiring to positive sales developments and optimism among businesses regarding near-term growth. Firms added new employees at the highest rate in over two years, driven by expectations of sustained demand.
As per the report, October also saw a rise in input costs, which grew at their fastest pace in three months, reflecting increased demand and economic activity.
Despite the rise in costs, strong sales growth remained a dominant theme, with businesses experiencing a historically elevated rate of sales expansion that was improved from September’s slower pace.
The report pointed out that new export sales also showed promising growth across India’s services sector. Survey respondents credited this increase to growing demand from international clients, with notable contributions from Africa, Asia, the Americas, the Middle East, and the UK.
This recovery in exports indicates that India’s services sector is benefitting from strengthening global demand, as well as domestic resilience.
“India’s services PMI recovered from its ten-month low in September to reach 58.5 last month. During October, the Indian services sector experienced strong expansions in output and consumer demand, as well as job creation, which achieved a 26-month high” said Pranjul Bhandari, Chief India Economist at HSBC.
Overall, the October PMI results indicate strong momentum in India’s service sector, underscored by high consumer demand, rising employment, and increased exports. The service sector’s performance adds to broader signs of economic health in India, with businesses optimistic about future growth even as they face cost pressures.
