Author: Shaloo Shrivastava
BENGALURU (Reuters) – India’s dominant services sector ended 2024 on a high as sustained demand pushed activity to a four-month high and led to strong hiring in December while inflationary pressures eased, a survey showed.
HSBC India’s final Services Purchasing Managers’ Index, compiled by S&P Global, rose to 59.3 in December from 58.4 in November, the highest reading since August but lower than the preliminary estimate of 60.8.
Activities in the sector have been expansive territories for more than three years. 50 marks separates the decrease from the increase.
A sub-index of new jobs – a gauge of demand – rose at the fastest pace in four months. It is also supported by solid global demand.
Strong demand and expanded capacities have kept confidence high in the coming year. Business optimism remained firm and above last year’s average, but below the six-month high in November.
“Forward-looking indicators such as new jobs and future activity suggest that the good performance is likely to continue in the near term,” noted Ines Lam, economist at HSBC.
High business confidence resulted in strong employment. Businesses continued to add workers at one of the strongest rates since the survey began in 2005. But that slowed from November’s 19-year high.
Inflationary pressures eased as both sub-indices, input prices and charged prices, fell. Input prices eased from November’s 15-month high, but were still elevated as businesses paid more for food, labor and materials.
Service providers passed on some of the additional costs to their customers, albeit at a slower pace than November’s nearly 12-year record.
“The decline in input price inflation in the month also supported business sentiment. The strength of the services PMI contrasted with growing signs of a slowdown in the manufacturing industry,” Lam added.
Strong growth in service activity offset a decline in manufacturing growth and lifted the overall composite PMI to 59.2 last month from 58.6 in November.
