PMI Service Index
India’s services sector maintained its robust growth momentum in May 2025, with business activity and new order volumes expanding at a pace similar to that observed over the past three months. A key highlight was a notable surge in international demand—the second strongest in the 19.5-year history of the survey—driven by increased interest from markets in Asia, Europe, and North America.
Employment saw a historic upswing, as service providers ramped up hiring to meet the sales growth. Nearly 16 percent of firms reported higher staffing levels, marking the fastest rate of job creation since the survey began.
Cost pressures also intensified, with input prices and output charges rising above their long-run averages. Increases were linked to higher expenses on overtime, raw materials such as cooking oil and meat, and general operating costs. This resulted in the sharpest inflation since the start of the year.
The seasonally adjusted HSBC India Services PMI Business Activity Index rose slightly to 58.8 in May 2025 from 58.7 in April 2025, indicating continued strong expansion supported by healthy demand, new client acquisitions, and increased workforce capacity. New orders remained buoyant due to marketing efforts, repeat customers, and strong underlying demand.
Business sentiment rebounded in May following a dip in April, as companies expressed optimism about future growth, citing better staffing, growing clientele, and strategic marketing as key drivers.
Outstanding work increased only marginally, reflecting reduced capacity pressures due to improved staffing.
Composite PMI Insights
The HSBC India Composite PMI Output Index registered 59.3 in May, slightly below April’s 59.7, yet still pointing to significant overall growth. While manufacturing output growth softened, the services sector gained momentum.
New business growth eased slightly across both manufacturing and services, though it remained robust. Employment growth across the combined sectors hit a record high, supported by strong demand trends.
Input costs rose sharply across the private sector, reaching a six-month peak, driven more by services than manufacturing. Selling prices also saw their fastest rise since November 2024, led by manufacturing.
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