India Services Sector Sees Slight Uptick In April, New Orders & Jobs Drive Growth

New Delhi: India's services sector expanded at a slightly quicker pace in April, supported by stronger demand and new business intakes, according to the HSBC India Services Purchasing Managers’ Index (PMI) released on Tuesday. The seasonally adjusted PMI rose to 58.7 in April, up from 58.5 in March, signaling a sharp expansion in activity and remaining well above the long-run average of 54.2.

A PMI score above 50 denotes expansion, while below 50 signals contraction.

Stronger Demand and Export Orders

The acceleration in services activity was largely attributed to a surge in new business orders, which matched the joint-highest increase in the past eight months. Many firms reported favorable market conditions and successful marketing efforts as key drivers.

International demand was another bright spot, with Asia, Europe, the Middle East, and the US cited as primary sources of growth. New export orders picked up notably, growing at their fastest rate since July 2024.

Workforce Expansion Continues

With new order inflows rising, Indian services firms ramped up hiring for the thirty-fifth consecutive month. Companies scaled up operational capacity by adding both full-time and part-time staff to meet heightened client demand.

This consistent employment growth points to sustained optimism in handling rising workloads.

Prices and Margins Strengthen

On the pricing front, firms raised their average selling prices in April to pass on higher input costs to clients. The rate of charge inflation was solid and above its long-term trend, outpacing that of the previous month.

Margins improved as cost pressures eased while selling prices rose, HSBC Chief India Economist Pranjul Bhandari noted.

Confidence Wanes Despite Optimism

Although service providers remained broadly optimistic about future business activity, their confidence dipped to its lowest level in nearly two years. Competitive pressures were cited as a factor dampening the outlook, despite strong advertising, productivity improvements, and resilient demand.

"Though firms remained optimistic about future growth, their confidence waned slightly," Bhandari commented.

Composite Output Also Rises

The HSBC India Composite PMI Output Index, which blends services and manufacturing data, also saw an uptick—from 59.5 in March to 59.7 in April. This reflects broad-based growth across both sectors.

New business volumes across the private sector rose at the fastest pace in eight months, driven by the service economy’s rebound. Meanwhile, manufacturers reported export order growth on par with March levels.