India PMI March 2024

India: Services PMI shows strong growth in March

The HSBC India Services Purchasing Managers’ Index (PMI) rose to 61.2 in March from 60.6 in February. As a result, the index moved further above the 50.0 no-change threshold, and signaled a faster improvement in services sector operating conditions compared to the previous month.

Key drivers behind the latest PMI reading include a record surge in new export orders and a substantial increase in total sales and business activity, reaching levels not seen in nearly 14 years, particularly in the finance and insurance sectors. This demand has also resulted in increased pressure on service providers’ capacity, supporting a significant rise in employment, the joint-fastest since November 2022.

However, this growth has come with its challenges, notably an intensification of price pressures. Both input costs and output charges increased at faster rates, with the rate of input price inflation being notably higher than its long-run average. Despite a strong business sentiment, there was a slight dip to a four-month low, attributed to concerns over competitive pressures. Nonetheless, firms remain optimistic about future demand trends, viewing marketing efforts as a potential growth avenue.

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