India’s services sector witnessed a strong rebound in February with the Purchasing Managers’ Index (PMI) rising to 59.0, a significant improvement from January’s 26-month low of 56.5.
Purchasing Managers Index (PMI) (Photo:X)
India’s services sector witnessed a strong rebound in February with the Purchasing Managers’ Index (PMI) rising to 59.0, a significant improvement from January’s 26-month low of 56.5.
The latest data, compiled by S&P Global, highlighted a surge in new business orders, both domestically and internationally, driving higher output and a notable rise in employment.
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While businesses reported higher cost burdens, inflation eased to a four-month low. Productivity improvements, strong underlying demand, and higher new business intake were key factors driving output growth.
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Sales performance also contributed significantly to the expansion, with February witnessing a historically strong upturn, surpassing January’s growth.
According to the data, the services sector expansion was fuelled by increasing demand, particularly from international markets, which recorded its fastest growth in six months.
Firms continued to scale up operations, leading to one of the sharpest increases in employment since records began in December 2005. Businesses reported hiring full- and part-time workers to accommodate rising workloads and ease capacity pressures.
The most significant cost pressures were noted in the consumer services segment, where rising expenses on food, materials, and packaging contributed to inflationary pressures.
Despite the services sector’s overall strength, cost pressures remained a concern, the survey said. While firms reported higher expenses due to additional recruitment, salary hikes, and increased overtime payments, the overall inflation rate for input costs eased to a four-month low.
Recently, the data compiled by S&P Global and released by HSBC also said that India’s Manufacturing PMI in February marked the slowest expansion since December 2023 falling to 56.3.
The decline was driven by weaker growth in output and sales, along with a slowdown in input purchasing to a 14-month low.
Although demand remained strong, inflationary pressures persisted, with firms passing higher labour costs to clients, it said.
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