BENGALURU (Reuters) – Growth in India’s dominant services sector slowed in April but remained robust thanks to robust domestic and foreign demand, lifting business confidence to its highest level in three months, according to an investigation published Monday.
HSBC’s final India Services Purchasing Managers’ Index, compiled by S&P Global, fell to 60.8 in April from 61.2 in March, confounding a preliminary estimate of a rise to 61.7.
Despite the decline in the overall figure, this figure remains one of the fastest growth rates in just under 14 years.
Activity in the services sector has been above the 50 mark separating growth and contraction since August 2021.
Favorable market conditions and sustained demand pushed the new business subindex to a three-month high, the third highest in about 14 years.
“Services activity in India grew at a slightly slower pace in April, supported by a further rise in new orders, with notable strength in domestic demand,” noted Pranjul Bhandari, chief India economist at HSBC.
“Even though new export orders remained robust, they showed a slight moderation compared to March.”
Strong global demand for Indian services means the index fell only slightly from March, when it reached its highest level since data collection began in September 2014.
However, growing business optimism has failed to create jobs at a significant rate. Hiring has been moderate, although the current streak of job growth has spanned nearly two years.
Operating costs have increased at a high rate due to rising raw material and labor costs. However, the pace at which businesses passed on the burden to their customers eased from a nearly seven-year high in March.
Quarterly inflation in India is expected to average 5.0% or lower this fiscal year, according to a Reuters poll in April, leaving room for the Reserve Bank of India (RBI) to cut rates.
Economists predict that the RBI will cut its policy repo rate by 50 basis points before the end of the year.
The manufacturing index released on Thursday fell slightly to 58.8 in April, which, combined with a slight decline in services activity, brought the overall composite PMI to 61.5 from an eight-year high. month of March 61.8.
“In terms of overall activity, overall output in the manufacturing and tertiary sectors increased significantly in April, although at a slightly slower pace, indicating sustained health in these sectors,” Bhandari added.
(Reporting by Shaloo Shrivastava; editing by Kim Coghill)
yahoo
