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India’s Services PMI Climbs to 59.3 in December 2024 Signaling Robust Growth

Prime Highlights:

Purchasing managers’ indexes are economic indicators based on the monthly private sector company-based surveys.

The Indian Services PMI was at 59.3 in December 2024, which reflected a sustained strong growth path for that country’s service sector.

Key Facts:

The Purchasing Managers’ Index for India’s services sector at 59.3 in December 2024 was above 58.4 recorded the previous month.

Although November was a little softer than 58.5 in October at 58.4, the services sector showed resilience with positive momentum going into business activity, hiring, and sales.

The services sector reports very high businesses with optimism at its peak in the last four months.

Key Background:

India’s services purchasing managers’ index shot up to 59.3 in December 2024, a good growth path for the country’s services sector. According to the final HSBC India services PMI compiled by S&P Global, it marked an increase from 58.4 recorded in November which meant there is a continuation of robust economic activity in the services industry despite a slight dip recorded in November.

The PMI in November had also declined marginally from 58.5 registered in October to 58.4, and the overall trajectory of the service sector was sturdy. Growth in hiring as well as that in sales reflected positivity in the outlook of the service sector. Ines Lam, economist at HSBC, stated, “Overall business activity has grown at a stronger pace in the past two months compared to the previous month, driven by the optimism within the services sector.”

Businesses in December showed strong business optimism. Forward-looking indicators include new business and expectations for future activity, both of which have continued to strengthen. December eased input price inflation further, which helped business sentiment. All these added to confidence that this growth was sustainable. On the other hand, PMI data from December was contrary to the comparison with manufacturing. The Indian manufacturing PMI declined to 56.4 in December, marking its lowest level in nearly 12 months. This recorded the lowest manufacturing PMI ever seen in the year 2024. It followed other sequential declines witnessed during November and January 2024 when the index bottomed at approximately 56.5.

The PMI serves as a key economic indicator, derived from a survey of business executives across various industries. It provides insights into business activities such as employment, production, new orders, supplier deliveries, and inventory levels. A PMI reading above 50 indicates expansion, while a reading below 50 signifies contraction. The December Services PMI of 59.3

reflects sustained expansion in India’s services sector, which, despite challenges in other areas of the economy, continues to be a primary driver of economic growth. This performance is significant, highlighting the resilience of the services sector amidst ongoing pressures in manufacturing. It paints a mixed but predominantly positive economic outlook for India in the final quarter of 2024.