NEW DELHI: India's services sector growth slowed to a five-month low in May amid intense competition, price pressures and a scorching heat, even as new orders from international markets rose at the fastest pace in a decade, a monthly... As per the survey has been released. Wednesday.
The seasonally adjusted HSBC India Services Business Activity Index fell to 60.2 in May from 60.8 a month earlier, its lowest level since last December.
Survey participants attributed these figures to a slight softening and continued strong domestic new orders, reflecting strong demand conditions and successful advertising.
In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 indicates contraction.May data showed that strong growth in new business entries in India's service economy continued to underpin output growth.
Another positive development, according to the survey, was that business confidence reached its strongest level in eight months.
Growth was reportedly supported by rising sales, productivity gains and demand strength. The rally was somewhat constrained by competitive and pricing pressures.
"India's services activity grew at a slightly slower pace in May, with domestic new orders declining slightly but remaining strong, reflecting strong demand conditions and successful advertising," said Maitreyi Das, global economist at HSBC."On the price front, cost pressures increased in May due to increase in raw material and labor costs. Companies were able to pass on only a part of the price increase to customers."
Like output, new orders also rose sharply, but at their slowest pace in the calendar year so far, even as fierce competition across the country and extreme heat slowed growth.
One area that improved significantly in May was new export orders, which saw the fastest growth since the beginning of the series in September 2014. Survey participants saw strong growth in demand from Asia, Africa, Europe, the Middle East and the Americas.,
Cost pressures intensified in May. According to panelists, outlays on materials and labor increased – while some companies suggested that the additional labor costs stemmed from overtime payments and salary revisions due to the strength of demand and increased productivity, many companies reported plans to take on additional employees. is indicated.
The survey said that not only has employment increased significantly, but it has also increased to the largest extent since August 2022. It said outstanding trading volume grew at the fastest pace in almost three and a half years, with the overall level of positive sentiment reaching an eight-month high.
Meanwhile, the HSBC India Composite Output Index fell to 60.5 in May from 61.5 in April, marking the slowest rate of expansion since last December.Factory output and service activity both grew modestly and total sales grew at the weakest pace ever in a calendar year, although faster than historically. Goods producers outperformed service providers, although growth was modest in both cases.
“The good news is that the level of optimism about the year-ahead outlook rose at the fastest pace in eight months, leading service companies to increase their staffing levels. Both factory output slowed growth in total. “Combined production and services activity have grown at a slightly slower pace,” Das said.The composite PMI index is a weighted average of comparable manufacturing and services PMI indices. The weights reflect the relative size of the manufacturing and service sectors according to official GDP data.
The seasonally adjusted HSBC India Services Business Activity Index fell to 60.2 in May from 60.8 a month earlier, its lowest level since last December.
Survey participants attributed these figures to a slight softening and continued strong domestic new orders, reflecting strong demand conditions and successful advertising.
In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 indicates contraction.May data showed that strong growth in new business entries in India's service economy continued to underpin output growth.
Another positive development, according to the survey, was that business confidence reached its strongest level in eight months.
Growth was reportedly supported by rising sales, productivity gains and demand strength. The rally was somewhat constrained by competitive and pricing pressures.
"India's services activity grew at a slightly slower pace in May, with domestic new orders declining slightly but remaining strong, reflecting strong demand conditions and successful advertising," said Maitreyi Das, global economist at HSBC."On the price front, cost pressures increased in May due to increase in raw material and labor costs. Companies were able to pass on only a part of the price increase to customers."
Like output, new orders also rose sharply, but at their slowest pace in the calendar year so far, even as fierce competition across the country and extreme heat slowed growth.
One area that improved significantly in May was new export orders, which saw the fastest growth since the beginning of the series in September 2014. Survey participants saw strong growth in demand from Asia, Africa, Europe, the Middle East and the Americas.,
Cost pressures intensified in May. According to panelists, outlays on materials and labor increased – while some companies suggested that the additional labor costs stemmed from overtime payments and salary revisions due to the strength of demand and increased productivity, many companies reported plans to take on additional employees. is indicated.
The survey said that not only has employment increased significantly, but it has also increased to the largest extent since August 2022. It said outstanding trading volume grew at the fastest pace in almost three and a half years, with the overall level of positive sentiment reaching an eight-month high.
Meanwhile, the HSBC India Composite Output Index fell to 60.5 in May from 61.5 in April, marking the slowest rate of expansion since last December.Factory output and service activity both grew modestly and total sales grew at the weakest pace ever in a calendar year, although faster than historically. Goods producers outperformed service providers, although growth was modest in both cases.
“The good news is that the level of optimism about the year-ahead outlook rose at the fastest pace in eight months, leading service companies to increase their staffing levels. Both factory output slowed growth in total. “Combined production and services activity have grown at a slightly slower pace,” Das said.The composite PMI index is a weighted average of comparable manufacturing and services PMI indices. The weights reflect the relative size of the manufacturing and service sectors according to official GDP data.
