India’s services growth accelerated in March, exports at record high, PMI shows

India’s services sector accelerated in March buoyed by strong demand, the final HSBC India Services Purchasing Managers’ Index, compiled by S&P Global, showed on April 4.

The number in March went up to 61.2 last month from February’s 60.6, confounding a preliminary reading for a fall to 60.3.

Quicker services expansion, combined with a 16-year growth high for India’s manufacturing industry in March, pushed the HSBC final India Composite PMI Index to an eight-month high of 61.8 from the previous month’s 60.6 and higher than a preliminary reading of 61.3.

According to the March numbers, employment in the services industry rose at the quickest pace in seven months and export business surged at a record rate.

A PMI reading above 50 means expansion, while a below-50 reading shows contraction. March was the 32-th consecutive month of expansion for the sector.

“India’s services PMI rose in March, following a small dip in February, on the back of strong demand that spurred sales and business activity,” News agency Reuters quoted Ines Lam, economist at HSBC, as saying.

The data showed March exports jumping at the fastest pace since the sub-index was included in the survey in September 2014.

New business during the month was driven by strong domestic demand and favouable economic conditions, the survey showed.

That in turn buoyed job sentiments as companies raised hiring to the fastest pace since August 2023.

The overall outlook for the year continued to be optimistic, the survey showed.

The March data, however, also showed the future activity sub-index had fallen to a four-month low, owing to lingering concerns over competitive pressures.

Prices in the industry also rose at the fastest rate since July 2017, as rising input costs combined with rising demand caused firms to pass on the increase to clients.

High prices could influence the RBI’s rate call, with the repo rate likely to be kept at the current 6.50% for a longer period, analysts said.

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