India’s Services Activity Rebounds In October, Driven By Strong Demand And Job Growth

India’s services Purchasing Managers’ Index (PMI) climbed from its ten-month low of 57.7 in September to 58.5 in October, according to the monthly report released by HSBC and compiled by S&P Global.

The seasonally adjusted HSBC India Services Business Activity Index rose due to strong sales pipelines and robust demand, pushing up business activity levels. 

"India’s services PMI recovered from its ten-month low in September to reach 58.5 last month. During October, the Indian services sector experienced strong expansions in output and consumer demand, as well as job creation, which achieved a 26-month high. Although input price inflation is accelerating from higher food and wage costs, the general inflation trajectory remains below the long-run average” Pranjul Bhandari, chief India economist at HSBC, said.

Latest data also highlighted a recovery in growth of new export sales across India's service economy, which survey respondents attributed to strengthening demand from clients in Africa, Asia, the Americas, the Middle East and the UK.

Input price inflation accelerated to a three-month high in October, with services companies mainly reporting greater food and wage costs.

However, the overall rate of inflation remained below its long-run average.

Business sentiment succinctly remained positive owing to healthy demand trends and new client enquiries.

In tandem, the HSBC India Composite Output Index rose from September’s 10-month low of 58.3 to 59.1 as new business inflows also expanded at quicker rates in both the manufacturing and service sectors, boosting growth of sales and employment at the composite level.

October saw a marked expansion in services employment, one that was the quickest for 26 months. Around 13 per cent of panellists reported job creation, compared to 9 per cent in September, the report said.

The PMI survey covers over 400 industries.

A PMI reading above 50 means expansion, while a score below 50 denotes contraction.

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