India's Services Sector Expands at Fastest Pace in 15 Years, Driven by Strong Demand
The survey, however, showed a substantial improvement in demand during August pushed growth of new orders and activity to their highest rates in over 15 years. “Moreover, the rise in international sales was the third strongest since the series started in September 2014,” it showed.
New Delhi: Driven by strong demand and rising international orders, India’s services sector expanded at its fastest pace in 15 years in August. The index, however, jumped to 62.9 in August from 60.5 in July, marking the sharpest growth since June 2010. The reason behind this unprecedented growth is primarily due to demand buoyancy, efficiency gains, and greater inflows of new business, a private survey said on Wednesday.
As per the survey conducted by the seasonally adjusted HSBC India Services PMI business activity, the index was up from 60.5 in July to 62.9 in August, indicating the steepest rate of expansion since June 2010. In the purchasing managers’ index or PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
The survey, however, showed a substantial improvement in demand during August pushed growth of new orders and activity to their highest rates in over 15 years. “Moreover, the rise in international sales was the third strongest since the series started in September 2014,” it showed.
“India’s services PMI business activity index reached a fifteen-year high last month, from 60.5 in July to 62.9 in August, on the back of surging new orders,” said Pranjul Bhandari, chief India Economist at HSBC, adding that panel members signalled greater demand from clients in Asia, Europe, the Middle East and the US.
“The broad-based expansion in international sales bolstered overall demand, which prompted Indian services firms to hire additional workers. Reflecting higher labour costs and robust demand conditions, both input and output prices increased substantially in August,” Bhandari said.
On the price front, the survey noted that the rate of inflation quickened to a nine-month high. Meanwhile, demand buoyancy facilitated the steepest increase in output charges since July 2012. “Meanwhile, year-ahead expectations improved to a joint five-month high in August (equal to May). Some companies also hope to be able to take on more work as a result of staff recruitment in recent months,” it noted.
