March Services PMI Points To Easing Inflationary Pressures

India’s services Purchasing Managers’ Index for March suggested easing inflationary pressures in the economy. Inflationary pressures across service economy fell as output charge inflation slowed to a three-and-a-half-year low in March. 

Prices charged for the provision of services rose at the weakest rate since September 2021 as cost pressures fell to a five-month low in March. Increase in prices charged on manufacturing goods in March was the weakest in one year. 

Heightened competition not only restricted price pressures, but was identified by panellists as the main challenge to output prospects.
PMI data pointed to an improvement in private sector activity. The HSBC India Composite PMI, a weighted average of manufacturing and services PMI indices, increased to a seven-month high of 59.5 in March from 58.8 in February. The Services PMI eased to 58.5 in March from 59.0 in February while the Manufacturing PMI rose to the highest in eight months at 58.1. A PMI reading of more than 50 points to an expansion in activity and less than 50 indicates a contraction.

Economic conditions across India's service sector remained favourable at the end of 2024-25 as demand strength and new business gains continued to underpin activity growth.

Services sector underlying data indicated a slowdown in growth of total new business reflecting weaker increase in international sales. New orders from abroad rose at the softest pace in 15 months in March.

The HSBC India Services PMI is compiled by S&P Global based on responses of around 400 service sector companies.
Despite the overall improvement in economic activity in March, the average Composite PMI in Jan-Mar at 58.7 was the weakest in the last five quarters.