India's Services Sector Ends 2024 with Robust Growth

India's services sector concluded 2024 strongly, as HSBC's PMI index rose to 59.3 from 58.4, reflecting a significant growth momentum. Despite a slight moderation in employment growth, finance and insurance led the upswing. Optimistic outlook persists amidst rising demand and expanded capacities.

India's services sector showcased formidable growth at the end of 2024 with the HSBC India Services Business Activity Index climbing to 59.3 in December from 58.4 in November. This marks the sector's most substantial expansion in four months, indicating a vibrant growth impetus as reflected in the latest HSBC PMI survey.

The survey credited sustained demand buoyancy for boosting new business inflows and output, prompting service providers to enhance employment levels despite a slight slowdown in job growth compared to November. Particularly, finance and insurance sub-sectors registered the most significant advancements in new orders and business activities.

Additionally, the survey highlighted optimism in the services sector, driven by expanded capacities, new customer enquiries, and strategic marketing investments, despite a softer rise in input costs. December also saw eased selling price inflation, offering some customer reprieve, alongside a solid increase in international orders.

However, the growth in foreign demand slowed, hitting a three-month low. Meanwhile, the HSBC India Composite Output Index, a confluence of services and manufacturing activities, climbed to 59.2 in December from 58.6 in November, with the services sector outpacing the manufacturing counterpart in growth.

Although overall business sentiment slightly dipped from November's peak, future business activity remains promising, bolstered by new business expansion and rising demand. As industry analysts anticipate 2025 trends, the resilience of India's service economy continues to pivot on robust local and global demand dynamics.

(With inputs from agencies.)