Indian services sector growth touches 10-month high in June on sharp upturn in new business: PMI

The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 58.8 in May to 60.4 in June, driven by sharp upturn in new business orders.

New Delhi: India’s services sector growth rose to 10-month high in June led by robust domestic demands even though export orders slowed when compared with the previous month, as per an industry survey report released by S&P Global on Thursday.

India’s Purchasing Managers’ Index (PMI) for services rose to 60.4 in June from 58.8 recorded in the previous month.

Services companies benefited most from the continued strength of the domestic market, alongside a marked increase in new export business, S&P Global said in its monthly survey report.

During the month under review the level of incoming new export orders rose at the slowest pace in three months. Despite the slowdown the growth in the international orders remained strong.

Overseas demand particularly improved from the Asian, Middle Eastern and the US markets, the report showed. The monthly report is based on a survey conducted among around 400 services companies spread across the country.

“The Services PMI business activity index was up to a ten-month high, led by a sharp rise in new domestic orders. New export orders also expanded, albeit at a softer pace,” said Pranjul Bhandari, Chief India Economist at HSBC.

Among the sectors, finance and insurance topped the growth rankings both in terms of output and new orders. The slowest expansion was recorded in real estate and business services.

Price pressures eased with both input cost and output charge inflation softening since May. The rate of input cost inflation across India's service economy eased to a ten-month low in June, and was below its long-run average.