January services PMI rises to 61.8, highest in 6 months

The Purchasing Managers’ Index, or PMI, for the services sector stood at 59.0 in December 2023.

Services activity in India continued to expand in January, with the HSBC Purchasing Managers' Index (PMI) for the sector coming in at a six-month high of 61.8, data released on February 5 showed.

At 61.8, the January services PMI is higher than the flash PMI of 61.2 released on January 24 and is also above the key level of 50, which separates expansion in activity from contraction, for the 30th month in a row.

The services PMI stood at 59.0 in December 2023.

"New business expanded at a faster pace and managers' expectation for future activity was strong. The new export business index accelerated, signaling that India's services exports remained robust" said Ines Lam, an economist at HSBC.

According to S&P Global, which compiles the index, the underlying data showed a "notable upturn" in new export orders.

As such, the rate of increase in export orders for service-providers in January was at a three-month high, with demand increasing from clients across the world, including Afghanistan, Australia, Brazil, China, Europe, the UAE, and the US. On the whole, the increase in new orders helped result in employment rising in January.

On the price front, January saw input costs for service-providers rising again, with the rate of increase being the highest in five months and above the long-run average.

"That said, with the vast majority of panellists opting to leave their charges unchanged and only 6 percent hiking them, output prices rose to the least extent in 11 months," S&P Global added.

Like the services index, the composite PMI also rose to a six-month high of 61.2 in January, with data released on February 1 showing that the manufacturing PMI last month was at a four-month high of 56.5.