India’s services sector PMI soars to 59.2 in November, fastest growth since 2005

India’s manufacturing sector and services providers saw growth in business activity in November, according to the latest HSBC India Services PMI (Purchasing Managers’ Index) survey compiled by S&P Global. The services sector witnessed strong growth with services PMI of 59.2 in November, up from 58.5 in October. This latest rise in service sector employment was the fastest since the survey started in December 2005. The manufacturing sector saw a slight slowdown to 60.2 in November from 60.4 in October.

The HSBC Flash India Composite Output Index, which tracks the combined output of India's manufacturing and service sectors, increased to 59.5 in November from 59.1 in October, marking the strongest growth in three months. The key factor behind this growth was soaring cost pressures, and the steepest selling prices since February 2013.

“Manufacturing firms registered a slightly stronger increase in international sales than their services counterparts. Manufacturers experienced faster expansions in new orders and output than services firms, but it was among the latter where job creation was most pronounced,” the survey states.

The overall manufacturing PMI came down to 57.3 in November, marginally down from 57.5 in October. “Aggregate new orders continued to increase midway through the third fiscal quarter, with demand strength cited as the main determinant of growth,” the survey adds.

The Flash PMI is published before the final data, giving an early indication of economic activity. The final PMI data for November will be available on December 4, 2024.

Pranjul Bhandari, chief India economist at HSBC, said, “India’s flash composite PMI moderately expanded from a final reading of 59.1 in October to 59.5 this month. Services saw a pick-up in growth, while the manufacturing sector managed to outperform expectations despite a marginal slowdown from its October final PMI reading. Strong end-demand and improving business conditions pushed services sector employment to the highest level ever recorded by this indicator since December 2005.”

“Meanwhile, price pressures are rising for raw materials used by manufacturers, as well as food and wage costs in the services sector,” Bhandari adds.