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India’s Services PMI saw an uptick in October, rising to 58.5 from 57.7 in September, recovering from a 10 month low, according to a report by S&P Global released on Wednesday.
This mirrors an improvement in the country’s Manufacturing PMI. The report said that that input costs surged at the fastest pace in three months, driven by higher wage and food costs. To offset these expenses, companies raised selling prices once again.
The HSBC India Composite Output Index also climbed, reaching 59.1 from a ten-month low of 58.3 in September, reflecting strong growth in economic activity.
This expansion was supported by robust demand conditions and an elevated rate of sales growth, which picked up from September’s slower pace. Export demand increased across regions, including Africa, Asia, the Americas, the Middle East, and the UK.
Movement of Services PMI in FY25
Employment in the services sector saw significant growth, with job creation rising by 13% in October from 9% in September, the fastest pace in 26 months.
“In October, India’s services sector showed strong gains in output, consumer demand, and employment,” said Pranjul Bhandari, Chief India Economist at HSBC.
She said that while input price inflation is accelerating due to higher food and wage costs, overall inflation remains below the long-term average.
Although business sentiment dipped slightly from September, the future activity index suggests optimism for the year ahead. Outstanding business volumes rose for the 34th consecutive month, with backlogs increasing at their highest rate since July.
Among industries, Finance and Insurance continued to see the strongest expansion.
The Services PMI, or Purchasing Managers’ Index, measures business activity in the services sector, with a reading above 50 indicating expansion, below 50 represents contraction while 50 means neutral activity.
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