The seasonally adjusted HSBC India Services Business Activity Index dipped marginally to 58.4 in November, compared with 58.5 in October. Services activity showed a sharp rate of expansion well above the trend, underpinned by demand strength and new business gains. A print above 50 shows growth.
Meanwhile, job creation in services sector rose at the fastest pace since the survey began in December 2005. Improving sales added to firms' capacity pressures, which in turn boosted job creation.
Anecdotal evidence highlighted a mix of permanent and temporary hiring by service providers
On the flipside, this record upturn in job creation led to intensified price pressures. Higher food and labour costs spiked business expenses midway through the third quarter. Input costs rose to the greatest extent in 15 months.
The rise in costs forced service providers' hand to increase their own charges in November. A few companies suggested that price hikes were supported by rosy demand, even as selling prices increased at the fastest rate in close to 12 years.
Total sales in November grew at a softer pace compared with the previous month, but the seasonally adjusted index still stood at more than four points above its long-run average.
Survey participants continued to see growing international demand for their services. Firms saw gains from clients in Asia, Europe, Latin America and the US. New orders grew at the quickest pace in three months, but well below the rate seen around the mid-2024.
Capacity pressures increased among service providers, with pending work being completed at the quickest pace in three months. This was commonly attributed to improvements in sales volumes.
Service providers were more confident regarding the year-ahead outlook for business activity. Confidence levels in November reached their highest level since May, boosted by predictions of continued demand strength and expectations that marketing efforts will drive new business.
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