New Delhi: India’s services activities accelerated at the strongest rate in four months in December 2024 on the back of growth in new business and softening in inflationary pressure, as per a private survey released on Monday.
The HSBC India services Purchasing Managers’ Index (PMI) compiled by S&P Global surged to 59.3 in December, rising from 58.4 in the previous month.
While a PMI reading above 50 means expansion, the print below 50 shows contraction.
One of the closely-watched high-frequency economic data, the survey said that demand buoyancy in December 2024 continued to drive new business inflows higher, which in turn supported output growth and prompted firms to recruit additional workers.
Noting that service providers remained confident that output would increase over the course of the coming 12 months, the survey said that companies remain upbeat towards the outlook for 2025.
“India’s services companies expressed strong optimism in December as business activity growth surged to a four-month high. Forward-looking indicators such as new business and future activity suggested that the strong performance will likely continue in the near future. The easing of input price inflation in the month also supported business sentiment,” said Ines Lam, Economist at HSBC.
Lam further said that strength in the services PMI stands in contrast with the growing signs of a slowdown in the manufacturing industry.
The manufacturing PMI hit a 12-month low of 56.4 during December last year.
Although services companies continued to see their business expenses rising in December 2024, the rate of inflation softened from November’s 15-month high. Anecdotal evidence suggested that firms paid more for food, labour and material.
