India`s services activity expands to 59 in February on robust demand
India’s services sector activity expanded sharply in the month of February, boosted by improving domestic and international demand. New orders placed with Indian services companies rose at a faster rate, while the uptick in growth underpinned a quicker expansion in output and a substantial increase in employment during the reported month. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index jumped to 59.0 in February from 56.5 in January. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also surged to 58.8 in February as against 57.7 in January.
In order to accommodate for rising new business and alleviate capacity pressures, Indian services firms continued to pursue recruitment drives. Employment expanded sharply, and at one of the fastest rates seen since data collection began in December 2005. Despite ongoing increases in staff numbers, Indian service providers continued to see their backlogs piling up in February. Outstanding business volumes rose at the joint-fastest rate since last May, matching that seen at the start of 2025.
On inflation front, labor was identified as a source of cost pressures - via additional recruitment, higher salaries and overtime payments. The companies also signaled greater outlays on food, material and packaging. However, the overall rate of cost inflation receded to a four-month low and was aligned with its historical trend. The rate of charge inflation was broadly similar to January, therefore remaining above its long-run average, as additional cost burdens had been passed on to the customers.
