As per a private survey, demand, job creation, and business optimism drove an increase in India’s Services PMI activity in December 2023. The HSBC India Services Purchasing Managers’ Index achieved a noteworthy rise to 59.0, signifying 29 consecutive months of expansion.
The survey attributed the surge to positive economic conditions and favourable demand trends, identifying them as key factors influencing output growth. In the final month of 2023, the survey revealed that India’s services activity gained momentum, supported by buoyant demand, robust job creation, and robust business optimism, underscoring the nation’s economic resilience.
India’s Services Sector Thrives in December 2023
India’s Services PMI activity gained momentum, propelled by demand buoyancy, strong job creation, and robust business optimism. The HSBC India Services PMI Purchasing Managers’ Index experienced a notable increase, rising to 59.0 in December from November’s one-year low of 56.9. This marks the 29th consecutive month of expansion for India’s services activity index, positioning it well above the 50-mark reading, which serves as a threshold between growth and contraction. The surge in the index reflects a sustained and resilient growth trajectory in the country’s services sector.
Pranjul Bhandari, HSBC’s Chief India Economist, stated,
“India’s Services PMI sector concluded the year on a high note, experiencing increased business activity driven by a three-month-high new orders index.”
“Input costs, while rising at a slower pace than in November, continued the softening trend since mid-2023. However, output prices increased at a faster rate, signalling improved corporate margins in December.”
The survey, citing anecdotal evidence, identified favourable economic conditions and positive demand trends as the primary drivers of output growth.
Services PMI Thrive, Manufacturing Dips Slightly
Experiencing a rebound from a one-year low in November, the new business sub-index in December showed an increase, attributed to favourable economic circumstances and positive demand. However, demand abroad saw its weakest rate of increase in six months.
Firms found relief from inflationary pressures as operating costs rose at the slowest pace since August 2020. Wednesday’s released data revealed a dip in India’s manufacturing sector index to 54.9 in December. Nonetheless, the robust performance in the services sector propelled the overall HSBC India Composite PMI Output Index to a three-month high of 58.5.