India's services sector growth rises in June on robust increase in new business, exports: PMI

New Delhi, Jul 3 (PTI) India's services sector growth quickened in June from May's five-month low, amid a stronger rise in new orders and an unprecedented expansion in international sales, a monthly survey said on Wednesday.

seasonally justed HSBC India Services Business Activity Index rose from 60.2 in May to 60.5 in June, pointing to a sharp expansion in output.

In Purchasing Manrs' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 detes contraction.

"Activity growth in India's service sector accelerated in June, with index rising by 0.3 ppt (percent point) to 60.5, led by an increase in both domestic and international new orders. This encourd services firms to increase ir staffing levels at fastest pace since August 2022," said Pranjul Bhandari, Chief India Ecomist at HSBC.

Demand strength and rising intakes of new business were cited as key determinants of growth. New orders received by Indian service providers continued to increase in June, extending current sequence of expansion to nearly three years.

re was also a record expansion in international orders. Asia, Australia, Europe, Latin America, Middle East and US were all cited as sources of new work from abro.

Positive client appetite encourd service providers in India to recruit ditional staff at end of first fiscal quarter. Staffing levels increased at fastest pace since August 2022, as short-term and permanent staff were taken on to support pipelines of new work.

On price front, service providers recorded a moderate increase in ir aver expenses due to higher food, fuel and labour costs. pace of inflation was neverless weakest in four months. Subsequently, selling prices also rose at slowest pace since February.

Going ahe, service providers remained confident of a rise in business activity over course of coming 12 months, with nearly 23 per cent of panellists expressing optimism.

"Input costs rose at a moderate pace, resulting in a softer uptick in output charges in June. Overall, service providers remain confident about year ahe business outlook, although level of optimism moderated sharply during month," Bhandari said.

Meanwhile, HSBC India Composite Output Index recovered from 60.5 in May to 60.9 in June, as new business and output expanded at faster rates.

" Composite PMI also accelerated in June, supported by greater inflows of new orders. Manufacturing firms contributed more to expansion than services firms," Bhandari said.

Composite PMI indices are weighted avers of comparable manufacturing and services PMI indices.

Private sector employment expanded at a sharp pace that was among quickest since series started in December 2005, survey said.

HSBC India Services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies. PTI DRR DR