New Delhi, July 3: Growth in India’s services sector accelerated in June on the back of robust domestic demand and a record rise in export orders, according to an HSBC survey released on Wednesday.
The strong demand also led to service providers hiring more staff with the pace of job creation touching a two-year high. HSBC’s India Services Purchasing Managers’ Index, compiled by S&P Global, rose to 60.5 in June from 60.2 in May.
“Activity growth in India’s service sector accelerated in June … led by an increase in both domestic and international new orders,” said Pranjul Bhandari, HSBC’s chief India economist. New business has been above breakeven since August 2021 and expanded at a faster pace last month.
That was supported by the fastest rise in international orders since the sub-index was added to the survey nearly a decade ago. “Overall, service providers remain confident about the year-ahead business outlook, although the level of optimism moderated sharply during the month,” Bhandari added.
Meanwhile, costs rose at the slowest pace in four months, indicating cooling inflation, and the report said that fewer than 5 per cent of firms surveyed opted to pass cost burdens to clients, resulting in only a moderate rate of inflation.
A rise in both manufacturing and services has pushed up the overall HSBC India Composite PMI to 60.9 in June. The survey supports the positive outlook ahead as Commerce and Industry Minister Piyush Goyal has projected that India’s goods and services exports are likely to increase by 3 per cent to surpass $800 billion in 2024-25.
Reserve Bank of India recently revised India’s growth forecast upward to 7.2 per cent from 7 per cent earlier and sees the Indian economy heading towards a higher growth trajectory of 8 per cent and above.
IANS