India Services PMI Rises To Six-Month High Of 59.8 In May On Strong Demand

(MENAFN- KNN India) New Delhi, Jun 3 (KNN) India's services sector recorded its strongest growth in six months during May, supported by robust domestic demand, improving export orders and rising business activity across segments such as freight, digital services, e-commerce, entertainment and information technology, according to the latest HSBC India Services PMI survey by S&P Global.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 59.8 in May from 58.8 in April, signalling the sharpest expansion in activity since November 2025.

The survey attributed the growth to healthy demand conditions, new client acquisitions and continued gains in business inflows.

New Business And Export Demand Gain Momentum

Commenting on the findings, Chief India Economist, HSBC, Pranjul Bhandari said,“India's services PMI signalled an expansion in business activity in May, supported by a continued rise in new business.”

“External demand for India-provided services also grew at a faster pace, rebounding after a sharp decline in April. Input cost inflation eased, which in turn reduced pressure on selling prices” she added.

New business received by service providers expanded at the fastest pace in six months, moving further away from the slowdown observed in March.

International demand also improved during the month, with firms reporting increased business from markets including Australia, Canada, France, Germany, Hong Kong, Malaysia, United Arab Emirates and the United Kingdom.

Price Pressures Ease Despite Rising Costs

Despite continued increases in selling prices, demand remained resilient. The pace of charge inflation eased to a four-month low and broadly aligned with the long-term average.

Only around 5 percent of surveyed firms reported raising prices, mainly to pass on higher operating expenses to customers.

Input costs continued to rise at an above-average pace, driven by higher spending on food, fuel, gas, labour and raw materials. However, inflationary pressures eased to their lowest level in four months.

The services sector also continued to generate employment, with payroll expansion remaining strong. Job creation was the second-fastest in nearly a year, although fewer than seven per cent of respondents reported increasing staff numbers, while most maintained existing workforce levels.

Business Confidence Softens Slightly

Business sentiment remained positive regarding the outlook for the next 12 months, supported by expectations of sustained demand and growth in activity. However, overall confidence slipped to a three-month low and remained below the historical average.

Among sub-sectors, consumer services emerged as the strongest performer, recording the fastest growth in both output and new business. The segment also registered the highest rates of input cost and output price inflation.

Composite PMI Signals Broad-Based Private Sector Growth

At the broader economy level, the HSBC India Composite PMI Output Index, which combines manufacturing and services activity, rose to 59.3 in May from 58.2 in April, reflecting stronger growth across the private sector.

The survey showed that new orders across the private sector increased at the quickest pace in six months, with services firms outperforming manufacturers, although both sectors reported accelerating demand.

While overall selling price inflation moderated, input cost inflation remained elevated, particularly in manufacturing, where both cost and price pressures were higher than in the services sector.

(KNN Bureau)

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