India's Services PMI Holds Strong At 60.5 In June

June data indicated a sustained upturn in Indian service sector output, with the rate of expansion quickening from May's five-month low amid a stronger rise in new orders and an unprecedented expansion in international sales. Moreover, staffing levels increased at the fastest pace since August 2022, as short-term and permanent staff were taken on to support pipelines of new work.

Reportedly due to higher food, fuel and labour costs, service providers recorded a moderate increase in their average expenses. The pace of inflation was nevertheless the weakest in four months. Subsequently, selling prices also rose at the slowest pace since February.

 

Rising from 60.2 in May to 60.5 in June, the seasonally adjusted HSBC India Services Business Activity Index pointed to a sharp expansion in output. The pace of increase was quicker than in May and above its long-run average. Demand strength and rising intakes of new business were cited as the key determinants of growth.

New orders received by Indian service providers continued to increase in June, extending the current sequence of expansion to nearly three years. Supporting the upturn in total new business was a record expansion in international orders.

Growth of private sector activity re-accelerated in June, after having eased to a five-month low in May. The HSBC India Composite Output Index recovered from 60.5 in the previous month to 60.9, highlighting a sharp rate of expansion that was considerably above the long-run series average. Manufacturing led the rise for the fifth straight month.

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