India’s services index rises to 58.5 in October, services employment grows at fastest rate in 26 months

India’s services sector witnessed a strong performance in October, as the services PMI index rose to 58.5 from a ten-month low of 57.7 in September, according to the HSBC India Services PMI compiled by S&P Global.

This increase reflects the sharp and accelerating rate of growth in the sector, surpassing its long-term average of 54.1.

HSBC noted, “Increasing from 57.7 in September to 58.5 in October, the headline figure was in line with a sharp and accelerating rate of growth that outpaced its long-term average.”

The index highlights that high demand as well as strong sales pipelines have significantly contributed to the expansion of business activity, marking October as a month of notable improvement for India’s services economy.

One of the key findings of the report was the sharp expansion in services employment, which grew at the fastest rate in 26 months.

The report attributes this increase in hiring to positive sales growth and optimism about near-term growth among businesses. Driven by expectations of continued demand, companies added new employees at the highest rate in two years.

October also saw input costs rise at the fastest pace in three months, reflecting rising demand and economic activity, according to the report.

Despite rising costs, strong sales growth remained a dominant theme, with businesses experiencing a historically high rate of sales expansion, a notable improvement from September’s slow pace.

India’s services sector has also seen promising growth in new export sales, the report said. Survey respondents attributed this growth to increasing demand from international customers, with notable contributions from Africa, Asia, the US, the Middle East and the UK.

This improvement in exports indicates that India’s services sector is benefiting from strengthening domestic resilience along with global demand.

“India’s services PMI recovered from its ten-month low in September to 58.5 last month. During October, the Indian services sector experienced strong expansion in output and consumer demand as well as job creation, which reached a 26-month high,” said Pranjul Bhandari, chief India economist at HSBC.

Overall, the October PMI results indicate strong momentum in India’s services sector, underpinned by higher consumer demand, rising employment and increased exports. The performance of the services sector adds to broader signs of economic health in India, with businesses optimistic about future growth despite facing cost pressures.

With strong domestic and international demand, the sector is well positioned for continued expansion in the coming months.