New Delhi: India’s services activities continued growth momentum and picked up in December 2023 on the back of new businesses and strong demand.
As per data released by S&P Global on Friday, HSBC India services Purchasing Managers’ Index (PMI) jumped to 59.0 in December 2023 from 56.9 in the previous month.
While a reading above 50 means expansion, the print below 50 shows contraction.
Services sector which contributes over 50% to India’s gross domestic product (GDP) has been one of the key growth drivers of the economy in the last several quarters.
“Rising from 56.9 to 59.0 in December, the seasonally adjusted HSBC India Services PMI Business Activity Index highlighted a sharp increase in output that was the most pronounced since September,” S&P Global said in a press note.
It further said that owing to lower readings in October and November, the latest quarterly average was the lowest since Q4 fiscal year 2022-2023.
Citing anecdotal evidence, the private survey noted that favourable economic conditions and positive demand trends were the key determinants of output growth.
“The rise in total new business was supported by continued growth of international sales. Service providers noted higher demand from clients based in Australia, Canada, Europe, the Middle East and South America during December. Having eased since November, however, the rate of expansion in new export orders was modest and the softest since June,” it said.
Commenting on the survey findings, Pranjul Bhandari, Chief India Economist at HSBC said that India’s services sector ended the year on a high note, with an uptick in business activity, led by a three-month high new orders index.
“Input costs rose at a slower pace than in November, continuing the softening trend which began in mid-2023. But output prices rose at a faster pace, indicating improved corporate margins in December,” Bhandari added.
