India's Services Sector Growth Hits 29-Month High In December, Marking Strong End To 2023: Report

In a positive end to 2023, India's services sector demonstrated robust growth in December, fueled by strong demand, substantial job creation, and optimistic business sentiments, according to the latest HSBC India Services Purchasing Managers' Index (PMI).

As reported by Economic Times, the index rebounded to 59.0 from November's one-year low of 56.9, marking the 29th consecutive month of expansion and well surpassing the growth threshold of 50.

Pranjul Bhandari, Chief India Economist at HSBC, noted, "India's services sector ended the year on a high note, with an uptick in business activity, led by a three-month-high new orders index."

Bhandari highlighted the positive trend of softening input costs since mid-2023, along with a faster rise in output prices, indicating improved corporate margins in December.

The survey, supported by anecdotal evidence, pointed to favourable economic conditions and positive demand trends as the primary drivers of output growth.

Despite a slower increase in international demand, the new business sub-index rebounded from a one-year low in November.

However, significant job growth remained elusive, with hiring picking up but at a relatively slow pace.

On a positive note, firms found relief from inflationary pressures, as operating costs rose at the slowest pace since August 2020.

Meanwhile, India's manufacturing sector index dipped to 54.9 in December, but the robust performance of the services sector lifted the overall HSBC India Composite PMI Output Index to a three-month high of 58.5, suggesting a resilient and balanced economic performance.