New Delhi, March 5 (Mayank Nigam) India’s services activities continued to grow but at a slower pace in February this year due to softer expansions in business activity, sales and jobs, a private survey said on Tuesday. The seasonally adjusted HSBC India services business activity index stood at 60.6 in February, down from 61.8 in January. While a reading above 50 means expansion, the print below 50 shows contraction. The latest survey also showed the second-weakest cost pressures in the services sector since August 2020 and the softest increase in selling charges for two years. “India’s services PMI (purchasing managers’ index) suggests that the pace of expansion in the services sector eased in February from January.
Due to a slowdown in growth in new orders and output, services companies’ outlook for future business activity, while remaining strongly positive, weakened slightly,” said Ines Lam, Economist at HSBC. “Prices charged for services rose at the slowest rate in 24 months as input prices inflation moderated,” the economist further said. As per the survey, companies created jobs in February this year on the back of rising workloads but the easing of capacity pressures and lower confidence towards the outlook dampened employment growth.
Granular data showed that business activity increased across all parts of the service sector. Finance & insurance saw the strongest pace of growth by a considerable margin, with the slowest rise registered in real estate & business services. “February data highlighted a notable upturn in demand across the service sector, with inflows of new business expanding for the thirty-first month running. That said, like for output, the rate growth softened from January’s recent high whilst remaining well above its long-run average,” the survey said.