India's Services PMI At Six-Month High In January On Demand Buoyancy

Services activity in the country highlighted a pickup in growth momentum in January due to surging demand that led to rise in sales and output, a private survey showed on Monday.

The seasonally adjusted HSBC India Services PMI Business Activity rose to 61.8 in January from 59 in December, according to a release. A print above 50 means expansion, while a reading below 50 indicates contraction.

The HSBC India Composite PMI Output Index rose from 58.5 in December to 61.2, indicating the sharpest upturn since mid-2023.

The current sequence of uninterrupted increases in Services PMI stretched to two and a-half years. According to survey participants, growth was spurred by demand buoyancy, productivity gains and rising intakes of new work.

New business placed with Indian service providers in January increased at the fastest rate in six months. Underlying data also showed a notable upturn in new export orders at Indian service providers in January, the strongest in three months.

Business confidence improved further at the start of the fourth quarter, with services companies at their most upbeat since last September. Besides demand strength, firms expect investment and productivity gains to induce output growth in the year ahead.

Amid reports of higher food, freight and salary costs, there was another increase in the overall expense of Indian services companies in January. The rate of inflation was marked, the fastest in five months and above its long-run average.

With the vast majority of panelists opting to leave their charges unchanged and only 6% hiking them, output prices rose to the lowest extent in 11 months. Granular data showed that Consumer Services led the rise in input costs, but it was in transport, information & communication that the quickest increase in selling prices was registered.

An expansion in outstanding business volumes continued to support job creation in January.