India's services PMI ends 2023 on three month high of 59.0
HSBC India services PMI hits 59.0, marking 29 months of consecutive expansion, driven by robust demand and positive economic conditions.
New Delhi: With the strong demand that spurred sales, fuelling business activity and massive job creation in the country, India's services sector activity continued to expand in December 2023, as the HSBC India services Purchasing Managers' Index (PMI) hit a three-month high of 59.0. Now, the services PMI has witnessed 29 consecutive months above the key level of 50 that separates expansion and contraction in activity, a private survey showed on Friday.
The survey also said that favourable economic conditions and positive demand trends were the key drivers of output growth. "New business intakes, not only increased in December but also reached their highest point in three months. The rise in total new business was bolstered by the continued growth of international sales. However, the rate of expansion in new export orders, which had been easing since November, was modest and the least vigorous since June," it said.
Commenting the survey, Pranjul Bhandari, chief India economist at HSBC, said that India’s services sector ended the year on a high note, with an uptick in business activity, led by a three-month high new orders index. "Input costs rose at a slower pace than in November, continuing the softening trend which began in mid-2023. But output prices rose at a faster pace, indicating improved corporate margins in December," Bhandari added.
The survey also noted that within new orders, those from abroad continued to grow, with Indian service providers seeing higher demand in December from clients based in Australia, Canada, Europe, the Middle East, and South America. "However, the rate of increase in these overseas orders was the lowest in six months," it showed.
Besides, it further said that the cost pressures have declined significantly, reaching a near three-and-a-half-year low. "Nevertheless, there has been a notable and robust increase in selling charges. The December PMI indicated a significant output increase, the highest since September. Despite lower figures in October and November, the latest quarterly average marked the lowest since the Q4 of the fiscal year 2022-23," the survey said.