Key Takeaways
- India’s services PMI eases to 60.2 in May, slower than 60.8 in April.
- Fierce competition, price pressures, and a severe heatwave are affecting the services sector growth.
- New business intakes continue to rise, but at a slower pace, indicating strong demand conditions.
- Export orders surge at a record pace, with broad-based demand from across the globe.
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 PMI dropped to 60.2 in May, a slight decrease from 60.8 in April. This marks the slowest pace of growth in the calendar year-to-date.
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.
“In May, India’s service activity grew at a slightly slower pace, with domestic new orders remaining robust, indicating strong demand and successful advertising efforts. New export orders surged at a record pace, with broad-based demand from across the globe.” 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
