By Anjali Sharma
New York – India’s services sector on Wednesday witnessed a strong rebound in February with the Purchasing Managers’ Index rose to 59.0, a significant improvement from January’s 26-month low of 56.5.
S&P Global complied latest data highlighted a surge in new business orders, both domestically and internationally, driving higher output and a notable rise in employment.
It shows businesses reported higher cost burdens, inflation eased to a four-month low.
Productivity improvements, strong underlying demand, and higher new business intake were key factors driving output growth.
The sales performance also contributed significantly to the expansion, with February witnessed a historically strong upturn, surpassing January’s growth.
According to the data, the services sector expansion was fuelled by increasing demand,from international markets, which recorded its fastest growth in six months.
Firms to scale up operations, leading to one of the sharpest increases in employment since records began in December 2005.
Businesses reported hiring full- and part-time workers to accommodate rising workloads and ease capacity pressures, the data stated.
The most significant cost pressures were noted in the consumer services segment, where rising expenses on food, materials, and packaging contributed to inflationary pressures.
The survey said that despite the services sector’s overall strength, cost pressures remained a concern.
The firms reported higher expenses due to additional recruitment, salary hikes, and increased overtime payments, the overall inflation rate for input costs eased to a four-month low.
Data compiled by S&P Global and released by HSBC said that India’s Manufacturing PMI in February marked the slowest expansion since December 2023 falling to 56.3.
The decline was driven by weaker growth in output and sales, along with a slowdown in input purchasing to a 14-month low, it stated
It added that the demand remained strong, inflationary pressures persisted, with firms passing higher labor costs to clients.
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