India's services sector PMI growth touched 58.8 in April; Hits five-month high as domestic demand surges

New Delhi [India], May 6 (ANI): India's services PMI climbed to a five-month high of 58.8 in April, a jump from 57.5 in March. This signalled a recovery in both output and new order intakes during the month.
According to the HSBC India Services PMI, the latest expansion reached its strongest rate since last November. Increased e-commerce and a significant shift toward domestic suppliers amid conflict in the Middle East primarily fueled this growth, particularly boosting transport activity.
Pranjul Bhandari, Chief India Economist at HSBC, said, "India's services PMI climbed to a five-month high of 58.8 in April. Activity and new orders strengthened, even as new export orders eased, suggesting that demand is rotating from overseas markets to domestic consumers amid the Middle East conflict. Input cost inflation moderated but remained elevated, while output price inflation stayed subdued, indicating that some firms are absorbing higher costs rather than passing them on. India's composite PMI also rose to 58.2 last month, up from 57.0 in March, pointing to renewed momentum across the manufacturing and services sectors."
Domestic demand led the way as external sales hit their second-lowest level in over a year. As per the HSBC release, the war in West Asia and cooling inbound tourism dampened international demand, causing the New Export Business Index to fall by more than five points.
In contrast, "competitive pricing, e-commerce and particularly strong customer demand for relocation and logistic services boosted sales growth."
Input costs for service companies continued to rise, specifically for food items like cooking oil, eggs, meat, and vegetables. Gas and labour expenses also increased as firms reported shortages of gas.
While the rate of cost inflation softened slightly in April, it remained among the highest levels recorded since late 2024.
"Only part of this additional cost burden was transferred through to customers, as signalled by an increase in selling prices that was moderate in comparison. The overall rate of charge inflation receded to a three-month low," the release said.
Hiring activity saw a notable boost at the start of the first fiscal quarter. The release mentioned that firm recruited more short-term staff and junior-level trainees to handle rising volumes of new business. This increase in employment occurred across all four broad areas of the service economy.
The additional workforce enabled firms to reduce their levels of outstanding business for the first time in four months.
"Optimism was supported by forecasts of demand growth, marketing initiatives and rising client enquiries. The level of positive sentiment nevertheless fell from March, dampened by worries surrounding the war in the Middle East and cost pressures," the release stated.
The broader private sector also showed signs of renewed momentum as factory production and services activity both regained strength. As per the HSBC India Composite PMI, Output Index rose to 58.2 in April from 57.0 in March.
This indicated a historically strong rate of expansion across the private sector, even though manufacturing firms experienced higher inflation in input and output charges than their services counterparts.
"At the composite level, the rate of input price inflation eased from March but was the second-highest since August 2023. Meanwhile, selling charges rose to the least extent in three months," the release mentioned. (ANI)

(This article was generated from news agency ANI without modifications to the text.)