India’s Services PMI Remains Strong at 58.4 in November

Buoyed by strong hiring and improved business conditions, India’s Services Purchasing Managers' Index (PMI) or HSBC India Services Business Activity Index remained upbeat at 58.4 in November compared to 58.5 in October. The index remained above the neutral 50 mark for 40 consecutive months..

As per the survey, job creation surged on the back of improved sales, while the employment growth reached its highest due to hiring of permanent and temporary staff. However, the marginal reduction of 0.1% (58.4% in November) can be attributed to inflationary pressure. Input cost reached its highest in 15 months whereas selling price soared to its fastest rate in 12 years.

Pranjul Bhandari, Chief India Economist at HSBC, said, “India posted a strong 58.4 services PMI in November 2024, down only a fraction from the prior month’s 58.5. During November, services sector employment notably grew at the fastest pace ever recorded since this survey began in 2005. The hiring surge reflected the sector’s improving business confidence, growing new orders, and vigorous international demand. At the same time, high food and labour costs drove up input and output prices to their fastest rates in 15 months and nearly 12 years respectively.”

Improved international demand has also stemmed growth in export orders as it increased by the quickest rate in three months. Gains were reported from clients in countries including Asia, Europe, Latin America and the US.

Interestingly, surge in demand has also led to expansion of operating capacities via recruitment drives. In a nutshell, employment is at the fastest pace since the inception of the survey in 2005.

The report concluded that the service providers were optimistic about the course of business activity in the coming year. It said, “Confidence reached its highest level since May, boosted by predictions of continued demand strength and expectations that marketing efforts will drive new business.”