India’s service sector showed remarkable growth in October, with the Service PMI index climbing to 58.5, up from 57.7 in September, according to HSBC’s India Service PMI report by S&P Global. This increase indicates an accelerated growth rate, surpassing the long-term sector average of 54.1.
HSBC noted, “The index, rising from 57.7 to 58.5, reflects a sharp increase in growth momentum, far above the historical average.” The expansion is attributed to strong sales pipelines and high demand, which boosted business activity and marked October as a strong recovery month for India’s services.
One standout finding was a record rise in services employment, growing at the fastest pace in over two years. This hiring surge was linked to positive sales momentum and a confident outlook on near-term growth. Firms recruiting new employees at a record pace, driven by optimism about continued demand.
The report also noted a rise in input costs, increasing at the quickest rate in three months due to heightened demand. Despite these cost pressures, robust sales growth remained a dominant theme, with companies seeing an accelerated rate of expansion compared to September.
New export sales showed promising growth as well, with survey participants reporting increased demand from clients in Africa, Asia, the Americas, the Middle East, and the UK. This export growth signals that India’s service sector is benefiting from strong global demand, along with stable domestic demand.
According to Pranjul Bhandari, Chief India Economist at HSBC, “India’s services PMI rose from its ten-month low in September to 58.5 in October, signaling significant expansions in output, consumer demand, and job growth, which reached a 26-month peak.”
Overall, October’s PMI reflects solid momentum in India’s service sector, bolstered by high consumer demand, increased hiring, and robust exports. This performance strengthens India’s economic outlook, as businesses remain positive about future growth, even amid rising costs. With strong demand both domestically and globally, the sector appears well-positioned for continued growth.
