India's Services Sectors Expands At Slower Pace In February, Charge Inflation At Two-Year Low
The seasonally adjusted HSBC India Services Business Activity Index registered 60.6 in February, down from 61.8 in January, but was comfortably above the mark of 50, denoting expansion.
India's service activity continued to expand but at a slightly slower pace in February, even as charge inflation moderated to a two-year low, a private survey showed.
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 mark of 50, denoting expansion.
February data highlighted a notable upturn in demand across the service sector, with inflows of new business expanding for the thirty-first month running, the survey showed.
Granular data showed that business activity increased across all parts of the service sector, as per the survey's findings. Finance & Insurance saw the strongest pace of growth by a considerable margin, with the slowest rise registered in Real Estate & Business Services.
New business from abroad placed with services firms in India rose for the thirteenth successive month.
India’s services PMI suggests that the pace of expansion in the services sector eased in February from January. Due to a slowdown in growth in new orders and output, services companies’ outlook for future business activity, while remaining strongly positive, weakened slightly.Ines Lam, Economist, HSBC
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.
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.
Business confidence regarding the year-ahead outlook for activity weakened in February. Still, around 26% of companies foresee growth and only 2% anticipate a fall. Where optimism was signalled, firms cited buoyant client appetite, greater publicity and an improvement in customer relations.
