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News18
3 days ago
- Business
- News18
India's Services Sector Booms in May; Job Creation Hits All-Time High Amid Strong Economic Tailwinds
Last Updated: IPOs worth Rs 1.4 lakh crore are in the pipeline for FY25, spanning sectors from infrastructure to consumer tech—pointing to growing investor appetite and corporate confidence India's services sector surged ahead in May this year, maintaining its powerful growth momentum and generating jobs at a record pace—signalling resilience in one of the country's key economic engines. According to the HSBC India Services Purchasing Managers' Index (PMI), business activity climbed to 58.8 in May from 58.7 in April, marking nearly three years of uninterrupted expansion. This steady growth was accompanied by the highest rate of job creation since the survey began in 2005, fuelled by robust domestic demand and a sharp rise in international orders. The sustained services growth adds to a series of economic indicators positioning India for a historic leap in global rankings. India has surpassed Japan to become the world's fourth-largest economy by nominal GDP and may surpass Germany by 2027, reflecting rising investor confidence and a resilient domestic market. May's services performance was underpinned by gains across customer-facing sectors like finance, business services, information technology, and real estate. New export orders saw their fastest rise in nearly 20 years, showcasing India's increasing integration with the global services economy. Companies reported improved demand conditions and confidence in future business prospects, prompting stronger hiring across the board. 'Activity in India's services sector remains resilient, with new business expanding at a sharp pace and firms hiring at the fastest rate on record," HSBC economist Maitreyi Das noted in the PMI report. India's broader macroeconomic environment is also helping drive growth. Morgan Stanley's global chief economist Seth Carpenter recently said India's outlook remains 'solid", supported by sustained capital formation, government infrastructure spending, and a structurally low inflation environment anchored by the Reserve Bank of India's policy stance. Business Standard reported that, adding to the momentum, the government has relaxed key provisions of the Special Economic Zones (SEZ) Act to encourage domestic production of semiconductors and electronics components—sectors deemed vital for technological self-sufficiency. The government's policy push has yielded tangible results at the grassroots level. India surpassed its procurement targets from Micro and Small Enterprises (MSEs) in FY24, fulfilling its mandate to source 25 per cent of public procurement from the sector—a key milestone for inclusive growth—the Economic Times reported. Simultaneously, foreign direct investment remains robust, with India attracting over $600 billion over the last decade, signalling long-term global confidence in its regulatory environment and economic direction. Capital markets are mirroring this optimism. The Financial Express reported that IPOs worth Rs 1.4 lakh crore are in the pipeline for FY25, spanning sectors from infrastructure to consumer tech—pointing to growing investor appetite and corporate confidence. With the services sector firing on all cylinders, supportive policies taking shape, and investor sentiment holding firm, India appears poised not only to meet but potentially exceed current growth projections. As the economy scales new heights, its success story is increasingly anchored in a services sector that continues to outperform, evolve, and employ at record levels—providing a solid foundation for India's next global leap. First Published: June 05, 2025, 13:09 IST
Zawya
04-04-2025
- Business
- Zawya
India March services growth moderated, inflation eased sharply, PMI shows
BENGALURU - The rapid expansion in India's dominant services sector cooled slightly in March amid softer demand, despite firms raising prices at the lowest rate in three-and-a-half-years, according to a survey that also showed a deceleration in job creation. The HSBC final India Services Purchasing Managers' Index , compiled by S&P Global, fell to 58.5 last month from 59.0 in February, but was higher than a preliminary estimate that showed a fall to 57.7. However, it remained comfortably ahead of the 50-mark separating contraction from growth. "Domestic and international demand remained fairly buoyant, despite being sequentially a tick lower than the month before," noted Pranjul Bhandari, chief India economist at HSBC. Domestic demand remained a key driver, with new business showing solid growth, albeit at a less intense pace compared to February. Foreign demand softened and international orders rose at the slowest pace in 15 months, signaling potential vulnerabilities to global economic shifts including from U.S. President Donald Trump's recently announced tariff measures. Inflationary pressures subsided with input cost inflation rising at its slowest pace in five months. That, along with intense competition, led to the weakest increase in output prices since September 2021. The competitive landscape weighed on business sentiment for the coming year and the future activity index cooled to a seven-month low, affecting employment growth. The pace of hiring additional staff slowed to the lowest in just under a year. "Looking ahead, business sentiment remains generally positive, but intensifying competition presents a significant challenge to many survey participants," added Bhandari. The HSBC India Composite PMI, which included robust manufacturing growth, rose to a seven-month high of 59.5 in March from February's 58.8, reflecting stronger overall private sector growth. Manufacturing growth outpaced services, but both sectors saw moderating employment growth and business confidence. Weaker inflation and poor business confidence could compel the Reserve Bank of India to cut interest rates again, by 25 basis points on April 9, to support an economy which likely grew at its slowest rate in four years last fiscal year. (Reporting by Anant Chandak; Editing by Kim Coghill)
Reuters
04-04-2025
- Business
- Reuters
India March services growth moderated, inflation eased sharply, PMI shows
BENGALURU, April 4 (Reuters) - The rapid expansion in India's dominant services sector cooled slightly in March amid softer demand, despite firms raising prices at the lowest rate in three-and-a-half-years, according to a survey that also showed a deceleration in job creation. The HSBC final India Services Purchasing Managers' Index (INPMIS=ECI), opens new tab, compiled by S&P Global, fell to 58.5 last month from 59.0 in February, but was higher than a preliminary estimate that showed a fall to 57.7. However, it remained comfortably ahead of the 50-mark separating contraction from growth. "Domestic and international demand remained fairly buoyant, despite being sequentially a tick lower than the month before," noted Pranjul Bhandari, chief India economist at HSBC. Domestic demand remained a key driver, with new business showing solid growth, albeit at a less intense pace compared to February. Foreign demand softened and international orders rose at the slowest pace in 15 months, signaling potential vulnerabilities to global economic shifts including from U.S. President Donald Trump's recently announced tariff measures. Inflationary pressures subsided with input cost inflation rising at its slowest pace in five months. That, along with intense competition, led to the weakest increase in output prices since September 2021. The competitive landscape weighed on business sentiment for the coming year and the future activity index cooled to a seven-month low, affecting employment growth. The pace of hiring additional staff slowed to the lowest in just under a year. "Looking ahead, business sentiment remains generally positive, but intensifying competition presents a significant challenge to many survey participants," added Bhandari. The HSBC India Composite PMI, which included robust manufacturing growth, rose to a seven-month high of 59.5 in March from February's 58.8, reflecting stronger overall private sector growth. Manufacturing growth outpaced services, but both sectors saw moderating employment growth and business confidence. Weaker inflation and poor business confidence could compel the Reserve Bank of India to cut interest rates again, by 25 basis points on April 9, to support an economy which likely grew at its slowest rate in four years last fiscal year.
Khaleej Times
05-02-2025
- Business
- Khaleej Times
Growth in India services sector slows to more than 2-year low in Jan, PMI shows
Growth in India's dominant services sector was the slowest in over two years in January amid cooling demand but remained historically strong and led to a substantial rate of hiring, a business survey showed on Wednesday. Asia's third-largest economy has been struggling with slackening consumption. To try and boost spending the government gave some tax relief to the middle class at its annual budget on Feb. 1 but shied away from announcing big reforms which are much needed to prop up growth. The HSBC final India Services Purchasing Managers' Index , compiled by S&P Global, fell to 56.5 in January from 59.3 in December, a tad lower than a preliminary estimate of 56.8 but comfortably ahead of the 50-mark separating contraction from growth. "The business activity and new business PMI indices eased to their lowest levels since November 2022 and November 2023 respectively," said Pranjul Bhandari, chief India economist at HSBC. "That said, new export business partly countered the downtrend and continued to rebound from a dip in late-2024, in line with official data." Demand for services rose at the slowest pace in 14 months but remained sturdy. It was supported by international demand that was the strongest in five months. The future activity sub-index moderated to a three-month low but the fall was insignificant and firms hired new staff at one of the fastest paces since the inception of the survey in December 2005. Inflationary pressures picked up, as both input costs and prices charged rose at a strong pace. But India's retail inflation eased to a four-month low in December, increasing the chances of easier monetary policy. The Reserve Bank of India is widely expected to cut its key repo rate on Feb. 7, a Reuters poll taken last week showed. Slower services growth overshadowed a six-month high pace of expansion in the manufacturing sector and dragged the overall Composite PMI down to 57.7 last month from 59.2 in December.
Reuters
05-02-2025
- Business
- Reuters
Growth in India services sector slows to more than 2-year low in Jan, PMI shows
BENGALURU, Feb 5 - Growth in India's dominant services sector was the slowest in over two years in January amid cooling demand but remained historically strong and led to a substantial rate of hiring, a business survey showed on Wednesday. Asia's third-largest economy has been struggling with slackening consumption. To try and boost spending the government gave some tax relief to the middle class at its annual budget on Feb. 1 but shied away from announcing big reforms which are much needed to prop up growth. The HSBC final India Services Purchasing Managers' Index (INPMIS=ECI), opens new tab, compiled by S&P Global, fell to 56.5 in January from 59.3 in December, a tad lower than a preliminary estimate of 56.8 but comfortably ahead of the 50-mark separating contraction from growth. "The business activity and new business PMI indices eased to their lowest levels since November 2022 and November 2023 respectively," said Pranjul Bhandari, chief India economist at HSBC. "That said, new export business partly countered the downtrend and continued to rebound from a dip in late-2024, in line with official data." Demand for services rose at the slowest pace in 14 months but remained sturdy. It was supported by international demand that was the strongest in five months. The future activity sub-index moderated to a three-month low but the fall was insignificant and firms hired new staff at one of the fastest paces since the inception of the survey in December 2005. Inflationary pressures picked up, as both input costs and prices charged rose at a strong pace. But India's retail inflation eased to a four-month low in December, increasing the chances of easier monetary policy. The Reserve Bank of India is widely expected to cut its key repo rate on Feb. 7, a Reuters poll taken last week showed. Slower services growth overshadowed a six-month high pace of expansion in the manufacturing sector (INPMI=ECI), opens new tab and dragged the overall Composite PMI down to 57.7 last month from 59.2 in December.
