Kolkata: The composite PMI as indicated by HSBC India Services PMI Business Activity Index rose in Feb, despite a deceleration in the services sector, which has been a driver of GDP over the past few years. “Overall, the composite PMI rose to 58.9, reflecting the fastest pace of private sector activity growth in three months, buoyed by strong momentum in manufacturing,” Pranjul Bhandari, chief India economist at HSBC was quoted in the media as saying. The index was at 58.4 in Jan.
The services sector, which has been an engine of growth in the past few years, moderated a bit in Feb as growth in new orders hit a 13-month low. Reports stated that the seasonally adjusted HSBC India Services PMI Business Activity Index recorded a rate of 58.1 Feb compared to 58.5 in Jan. Among the factors responsible were mainly two — a slower rise in demand and retail inflation inching up. According to the Purchasing Managers’ Index, a score above 50 indicates expansion of the sector, while the score below 50 indicates shrinkage.
Services almost flat
“India’s Services PMI registered 58.1 in February, largely unchanged from January’s 58.5, signalling another month of robust expansion in the sector…. While new order growth slowed to a 13-month low amid rising competition, service providers saw a notable pick-up in international sales and responded with increased hiring to meet operational needs,” Pranjul Bhandari, chief India economist at HSBC was quoted by PTI as saying.
Exports marked outperformance. Reports stated that services firms reported gains from many geographies such as China, Canada, Germany, Singapore, the UAE, the UK and even the US, which had slapped 50% duty on goods imports from India. On the whole, global sales grew the fastest since August 2025.
Indicator of business confidence
“Input and output price inflation accelerated, with firms passing higher expenses — particularly for food and labour — on to customers, yet business confidence climbed to its highest level in a year as companies looked to broaden their market presence,” Bhandari said.
Composite PMI indices are weighted averages of manufacturing and services PMI indices. The weights mirror the relative size of different manufacturing and service sectors going by GDP data. The HSBC India Services PM is one of the indictors that are regularly considered by economists and analysts. It is compiled by S&P Global from responses that are sent by around 400 service sector companies. The sectors covered include consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services.