India’s services sector growth reached a four-month high in December, driven by robust demand that boosted business activity and supported strong job creation, according to a survey released on Monday.
The HSBC India Services Purchasing Managers’ Index, compiled by S&P Global, rose to 59.3 in December from 58.4 in November, marking the highest level since August.
Companies attributed strong underlying demand as the primary driver of output growth in the services sector. In some instances, survey members indicated that recent efforts to expand capacities allowed them to accept more work.
The overall level of positive sentiment remained above its long-run average, with service providers exuding confidence that output would increase over the course of the coming 12 months. Expanded capacities, increased customer inquiries, and budget allocations for marketing were some of the factors propelling growth.
While service companies continued to face rising business expenses in December, the rate of inflation eased from November’s 15-month high. Reflecting a further increase in input costs, service providers raised their own fees again in December.
The combination of new business growth, upbeat forecasts, and rising capacity pressures supported another round of job creation across the services sector. Firms continued to add workers at one of the strongest paces since the survey started in 2005. However, hiring was slightly lower than November’s 19-year high.
There was a solid increase in international orders placed with service providers during December, which augurs well for employment and growth in the months ahead.
“Forward-looking indicators such as new business and future activity suggested that the strong performance will likely continue in the near future,” said Ines Lam, economist at HSBC.
The robust growth in services activity offset a decline in manufacturing growth, lifting the overall Composite PMI to 59.2 in December from 58.6 in November, thereby supporting the overall economic growth rate.
(Inputs from IANS)
