India Services Sector Continues Stronger Growth In February

India's service sector continued to grow during February as positive demand trends supported sales and business activity. Growth rates slowed since January, though remained historically substantial. The latest HSBC PMI also showed the second-weakest cost pressures in the sector since August 2020 and the softest increase in selling charges for two years.

Companies created jobs on the back of rising workloads, but the easing of capacity pressures and lower confidence towards the outlook dampened employment growth.

The seasonally adjusted HSBC India Services Business Activity Index registered 60.6 in February, down from 61.8 in January. Despite having slipped, the headline index was comfortably above the neutral mark of 50.0 and signalled a sharp rate of expansion that was well above the series history (since December 2005).

 

Granular data showed that business activity increased across all parts of the service sector. February data highlighted a notable upturn in demand across the service sector, with inflows of new business expanding for the thirty-first month running.

With both manufacturing production and services activity in India increasing during February, there was a further upturn in private sector output. The HSBC India Composite PMI Output Index slipped from a six-month high of 61.2 in January to 60.6, indicating a softer but sharp rate of expansion.

Growth of private sector sales likewise remained sharp in spite of softening since January. Rates of expansion were broadly similar at manufacturers and services firms, though the former registered an acceleration and the latter a slowdown.

Powered by Capital Market - Live News