Informist, Monday, May 6, 2024

--India Apr services PMI 60.8 vs 61.2 in Mar

--India Apr composite PMI 61.5 vs 61.8 in Mar

NEW DELHI – India's services sector activity slowed down in April, with the HSBC India services Purchasing Managers' Index compiled by S&P Global falling to 60.8 during the month from 61.2 in March.

Despite the moderation in activity, the April services PMI print showed one of the strongest growth rates in just under 14 years, S&P Global said in a release. "Survey members attributed the latest upturn in output to favourable economic conditions, demand strength and rising intakes of new work," it said.

A reading above 50 denotes expansion in activity, while a print below 50 indicates contraction. The flash services PMI for April, released on Apr 23, was at 61.7.

"India's service activity rose at a slightly softer pace in April, backed by a further rise in new orders, with a notable strength in domestic demand," Pranjul Bhandari, chief India economist at HSBC, said in the release. "Although new export orders remained robust, they showed a slight moderation from March figures."

Domestic demand remained buoyant in the first month of the new financial year, with growth of new business and output among the fastest in 14 years, S&P Global said. Export orders eased from the previous month but rose at the second-quickest pace since the series started in September 2014, S&P Global said.

Wage pressures and higher food prices led to an increase in cost burdens in April, which firms partially passed on to their customers, S&P Global said. However, charge inflation eased in April from a near seven-year high in March.

"Input costs continued to rise sharply, albeit slower than in March, but resulted in squeezed margins for service firms, as only part of the price rise was passed on to clients through output charges," Bhandari noted.

Some firms hired new employees on the back of rising inflows of new business, but several companies indicated that payroll numbers were sufficient for current requirements. As such, the rate of job creation in April was marginal and lower than the previous month, S&P Global said.

Confidence among service providers towards the year-ahead outlook for business activity improved to a three-month high, thanks to resilient demand, S&P Global said. "Marketing efforts and efficiency gains, alongside plans to price competitively and predictions that demand conditions will remain favourable, boosted optimism," S&P Global said in the release.

The composite Purchasing Managers' Index, which is the weighted average of the manufacturing and services indices, fell to 61.5 in April from 61.8 in March. The Flash Composite PMI for April was 62.2. Data released on Thursday showed India's manufacturing Purchasing Managers' Index eased to 58.8 in April from a 16-year high of 59.1 in March. End

Reported by Shubham Rana

Edited by Avishek Dutta

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