India’s services sector witnessed a strong rebound in February, with the HSBC India Services Purchasing Managers’ Index (PMI) climbing to 59.0, up from 56.5 in January—its lowest level in over two years. The data, compiled by S&P Global, highlights renewed momentum in the sector, driven by a surge in global demand.
However, manufacturing growth decelerated as new orders declined and production momentum slowed, with the Manufacturing PMI dropping to 56.3, a 14-month low, compared to 57.7 in January. This slowdown in manufacturing activity slightly impacted the broader economy, but strong services growth helped lift the overall Composite PMI to 58.8, up from 57.7 last month.
Key Insights:
- Services PMI: 59.0 in February (vs. 56.5 in January)
- Manufacturing PMI: 56.3 in February (vs. 57.7 in January)
- Composite PMI: 58.8 in February (vs. 57.7 in January)
According to Pranjul Bhandari, Chief India Economist at HSBC, the services sector benefitted from rising global demand, which recorded its fastest growth in six months. Additionally, job creation and pricing power remained strong, although business sentiment slightly slipped to its lowest since August 2024.
The Purchasing Managers’ Index (PMI) is a critical economic indicator that provides insights into business activity across manufacturing and services sectors. A PMI reading above 50 indicates expansion, while a reading below 50 suggests contraction.
