India’s February Services PMI: Growth Eases to 60.6

In February, India’s service sector sustained its growth trajectory, supported by positive demand trends. However, there was a slight moderation in growth compared to January, with the Purchasing Managers’ Index (PMI) dropping to 60.6 from 61.8. Despite this decline, the sector remained well above the neutral mark of 50.0, indicating a sharp rate of expansion.

1. Headline PMI Figure

• The Purchasing Managers’ Index (PMI) for India’s services sector dropped to 60.6 in February from January’s six-month high of 61.8.
• Despite the decline, the index remained comfortably above the neutral mark of 50.0, indicating a sharp rate of expansion well above historical averages.

2. Business Activity

• Business activity expanded across all sectors, with Finance & Insurance leading the growth while Real Estate & Business Services showed the slowest rise.

3. Employment Growth

• Companies created jobs driven by rising workloads, although employment growth was dampened by easing capacity pressures and lower confidence towards the outlook.

4. New Orders and Output

• Growth in new orders and output slowed in the services sector, contributing to the overall decline in the headline PMI figure.
• Despite the slowdown, both metrics remained above the long-run average, indicating sustained demand.

5. International Sales

• New business from abroad continued to rise for the thirteenth consecutive month, with gains reported from various regions including Australia, Asia, Europe, the Americas, and the UAE.
• International sales expanded at a solid rate, marking one of the best performances in the series history.

6. Composite PMI Output Index

• The HSBC India Composite PMI Output Index, which includes both manufacturing and services, slipped from 61.2 in January to 60.6 in February.
• Private sector output continued to expand at a sharp rate, with growth in sales remaining strong despite some softening since January.