Services activity rises to a 3-month high of 58.8 in May

Services activity data for May

India’s services sector activity gained pace in May to rise to a three-month high of 58.8 from 58.7 in April, as international orders poured in at a faster rate, data released by a private survey on June 4 showed.

The HSBC India Services Purchasing Managers' Index has now stayed above the 58 mark for four months in a row.

"India registered a 58.8 services PMI in May 2025, broadly in line with the steady readings from recent months. Strong international demand continued to fuel services activity, as evidenced by the new export business index’s uptick from April," said Pranjul Bhandari, chief India economist, HSBC.

The performance of the services in May contrasts with manufacturing sector, with the index slipping to a three-month low of 57.6, as cost pressures and India-Pakistan conflict weighed on economic activity.

Despite the threat of Trump tariffs, there was some positives, with export growth rising to one of its highest levels in three years. This trend was visible in services as well and helped lift employment.

Almost 16% of panel members reported higher payroll numbers, while 1% indicated a fall. The resulting overall rate of job creation was the strongest in the history of the survey, the release stated.

On the price front, there was an intensification of price pressures, as the rate of inflation was the joint strongest since November 2024.

The better conditions also helped support business sentiment, with confidence level rising.

"Upgraded forecasts stemmed from expectations that greater staffing capacity, expanded clientele and marketing initiatives will support activity growth in the year ahead," stated the release.

Business activity was pushed to a three month low of 59.3 in May compared with 59.7 in the previous month, dragged by the manufacturing sector.