The Aryavarth Express
Agency (New Delhi): India’s services sector maintained strong growth in April, with new business and output showing substantial gains, according to a recent survey. Although growth eased slightly, it remained among the fastest rates recorded in nearly 14 years. The seasonally adjusted HSBC India Services Business Activity Index fell to 60.8 from March’s 61.2 but still indicated one of the strongest growth rates since 2010.
Survey respondents attributed this surge in output to favorable economic conditions, robust demand, and a rise in new work. The Purchasing Managers’ Index (PMI) indicated continued expansion with a score above 50, highlighting sustained growth in the services sector.
Pranjul Bhandari, Chief India Economist at HSBC, noted that “India’s service activity rose at a slightly softer pace in April, backed by a further rise in new orders, with notable strength in domestic demand.” International business also contributed to the growth, as firms reported a significant increase in global orders.
Job creation in the sector was modest, with some service providers adding staff to handle new business. However, many companies indicated that their current workforce was sufficient, resulting in slower hiring compared to the previous fiscal year.
Rising wage and food costs placed pressure on businesses, leading to increased input costs. Service firms passed some of these costs on to clients, though not fully, resulting in tighter margins.
Despite cost challenges, confidence among service providers about future business prospects improved to a three-month high. Optimism was driven by enhanced marketing efforts, efficiency gains, competitive pricing strategies, and expectations of continued favorable demand.
The HSBC India Composite PMI Output Index, combining data from both manufacturing and services, fell slightly to 61.5 in April from 61.8 in March. However, the index still showed substantial growth across the private sector. Manufacturing continued to lead new business intakes over services, with aggregate sales rising significantly.
