New Delhi, Feb 5 (FN Bureau) India’s dominant services sector slowed down to over two-year low in January 2025 as demand softened during the month, as per a private survey released on Wednesday. The HSBC India services Purchasing Managers’ Index (PMI) compiled by S&P Global fell to 56.5 in January 2025 from 59.3 in the previous month. The headline figure is the lowest since November 2022. While a PMI reading above 50 means expansion, the print below 50 shows contraction. Pranjul Bhandari, Chief India Economist at HSBC said, “India’s services sector lost growth momentum in January, although the PMI remained well above the 50-breakeven level. The business activity and new business PMI indices eased to their lowest levels since November 2022 and November 2023 respectively.”
“That said, new export business partly countered the downtrend and continued to rebound from a dip in late-2024, in line with official data which showed India’s services exports shining in December and capturing a larger share of global trade,” added Bhandari. One of the closely-watched high-frequency economic data, the survey said that in January this year new business intakes rose at the slowest pace since November 2023 curbing the upturn in business activity. “Nevertheless, rates of expansion remained historically high and more jobs were created. Also, the degree of business sentiment was in line with its trend,” it said. As per the survey findings, several companies linked output growth to favourable demand conditions, new business wins and investment in technology.
“However, a few firms suggested that activity levels at their units were constrained by a fall in customer numbers,” it said. It further said that service providers in India were confident of a rise in business activity over the course of the coming 12 months. The HSBC India Services PMI is compiled from responses to questionnaires sent to a panel of around 400 service sector companies. The sectors covered include consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services.