Services Maintain Robust Growth in May
With strong export demand and record hiring, India's services activities remained dominant, maintaining its robust growth in May despite price pressures.
New Delhi:With strong export demand and record hiring, India's services activities remained dominant, maintaining its robust growth in May despite price pressures. The HSBC India services purchasing managers' index (PMI), compiled by S&P Global, stood at 58.8 in May, marginally up from April's 58.7 but lower than a preliminary reading of 61.2, a private survey showed on Wednesday.
As per the survey, new orders rose at a sharp pace largely driven by advertising, demand strength and repeat orders from existing clients. “Though the price gauges showed an intensification of input cost and output charge inflation, with rates of increase edging above their historical averages in each case, there was a recovery in business sentiment during May,” the survey said
In the PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction. “India registered a 58.8 services PMI in May 2025, broadly in line with the steady readings from recent months. Strong international demand continued to fuel services activity, as evidenced by the new export business index’s uptick from April,” said Pranjul Bhandari, Chief India Economist at HSBC.
The survey also showed that companies observed a near-record improvement in international demand for their services during May with faster increases in new export orders recorded in Asia, Europe and North America in particular. “To keep up with swelling demand, India's service providers heavily increased staff recruitment. Indeed, the employment index rose to the highest reading ever recorded by this survey,” Bhandari added.
The survey further noted that almost 16 percent of panel members reported higher payroll numbers, while 1 per cent indicated a fall. “The resulting overall rate of job creation was the strongest in the history of the survey. The increase in workforce numbers, coupled with overtime payments, added to firms’ cost burdens. Some companies also cited greater outlays on cooking oil, material and meat,” the survey showed.