BENGALURU: India’s services sector expansion slowed to its weakest pace in 11 months in December as new business growth eased and hiring stalled, a survey showed on Tuesday.
HSBC’s India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, dropped to 58.0 last month from November’s 59.8, lower than a preliminary estimate of 59.1. A reading above 50.0 indicates growth in activity, while below that level points to a contraction.
“While India’s service sector continued to perform well in December, the retreat in several survey indicators as 2025 ended may suggest a moderation in growth heading into the new year,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.
New business growth – a key gauge for demand – eased to its slowest pace since January 2025. While companies reported continued demand buoyancy and positive client interest, growth was moderated by competition from alternative providers offering cheaper services.
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The employment trend worsened as the 42-month hiring streak came to an end last month with firms marginally reducing staffing levels. Nearly all firms surveyed (96%) kept workforce levels unchanged.
Business confidence regarding future activity declined for the third consecutive month, reaching its lowest point in over three years.
But international demand provided a bright spot with new export orders accelerating from November’s eight-month low.
On the price front, input costs rose moderately in December, faster than in November but remaining below the long-term trend. Output price inflation remained weak with fewer than 3% of surveyed firms raising their fees.
“What bodes well for the outlook is the benign inflation environment. If services firms continue to see only mild increases in their expenses, they should be better positioned to compete and limit price hikes, thereby boosting sales and creating more jobs,” De Lima said.
HSBC’s India Composite PMI, including manufacturing activity which slowed to its weakest pace in two years, fell to 57.8 in December from 59.7 in November, marking an 11-month low.
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