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India’s services sector maintains gaining momentum; PMI at 58.8 in May
Jun-04-2025

India’s services sector maintained gaining momentum in the month of May 2025, amid higher exports with the strongest improvements in international demand. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index grew to 58.8 in May from 58.7 in April. However, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- eased to 59.3 in May as against 59.7 in April.

To accommodate for ongoing expansions in new business intakes, service providers continued to recruit additional staff. The increase in workforce numbers, coupled with overtime payments, added to firms' cost burdens. Some companies also cited greater outlays on cooking oil, material and meat. The overall rate of inflation edged above the series average and was the highest since the start of the current calendar year. Likewise, services charges in India rose to a greater degree halfway through the first fiscal quarter. The rate of inflation was the joint-strongest since November 2024 and historically marked.

The report further noted that there was an easing of capacity pressures at services companies, as outstanding business increased at a slower pace. The rate of accumulation was marginal and the weakest in eight months. The slower fall in backlogs of work was a result of jobs growth. Besides, there was a recovery in business sentiment during May, with the overall level of confidence rising from April's 23-month low.


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