While the HSBC India Services Business Activity Index, or services PMI, decreased to 58.5 from 59.0 in February, it was still higher than an initial estimate that indicated a decline to 57.7, indicating a loss of growth momentum for India’s service providers in March. It did, however, show a high rate of expansion and was comfortably above the neutral threshold of 50.0.
The end of FY25 saw favorable economic circumstances throughout India’s service industry, with activity growth being supported by both new business gains and strong demand. Despite being lower than in November, expansion rates were historically high. According to S&P Global, the statistics for March indicated that overseas orders had increased at the weakest rate since December 2023.
Participants in the poll stated that robust underlying demand and ongoing expansion in new business were the main drivers of output. It further stated that even though sales grew more slowly than in February, the growth was still noteworthy.
When it came to company activity and sales, the sectors with the strongest growth patterns were Finance & Insurance and Consumer Services. In addition to reducing pricing pressures, the increased competitiveness was recognized by panelists as the primary obstacle to output prospects. Positive mood fell to a seven-month low and fell short of its long-term norm.
Additionally, the hiring rate in the services sector dropped to its lowest level in less than a year. Some businesses claimed to have enough capacity to meet present needs.
In the meantime, March saw a significant increase in private sector activity in India as businesses welcomed a further increase in new orders. In addition, the HSBC India Composite PMI Output Index showed another month of above-trend growth, rising from 58.8 in February to a seven-month high of 59.5.
