New Delhi: India’s services sector activities remained in expansion mode but the pace of growth slowed down in the month of May this year, as per a survey compiled by S&P Global on Wednesday.
The HSBC India services Purchasing Managers’ Index (PMI) dipped marginally to 60.2 in May from 60.8 in the previous month.
A PMI print below 50 means contraction while above it shows expansion in activities.
The survey data showed robust increases in new business intakes continued in the month of May. As per the survey, service sector activity eased to the slowest in the calendar year-to-date in May amid fierce competition, price pressures and a severe heatwave.
“India’s service activity rose at a slightly softer pace in May, with domestic new orders easing slightly, but remaining robust, implying strong demand conditions and successful advertising. New export orders surged at a record pace, with broad-based demand from across the globe,” said Maitreyi Das, Global Economist at HSBC.
Das further said, “On the price front, cost pressures ticked up in May led by higher raw material and labour costs. Firms were only able to transfer a part of the price rise to customers. Good news is the level of optimism about the year-ahead outlook rose at the fastest pace in eight months, leading service firms to increase their staffing levels. Overall composite output rose at a slightly slower pace, led by slower rises in both factory production and service activity.”
The HSBC India Services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies. The sectors covered include consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services. It is one of the closely-watched high-frequency data by economists, markets and policy-makers
