The final India Services Purchasing Managers' Index (PMI) for December 2024 increased to 59.3 points from 58.4 points in November, indicating improvement in the country's services sector, according to the HSBC Final India Services PMI, calculated by S&P Global on Monday.

The minor decrease in November, when the PMI dipped to 58.4 from 58.5 in October, did not detract from the sector's overall strength. The HSBC Final India PMI also showed favorable developments during this time, with increases in both hiring and sales.

Ines Lam, an economist at HSBC, stated that "India's services companies expressed strong optimism in December as business activity growth surged to a four-month high." Forward-looking indicators, such as new business and future activities, indicated that the high performance would likely continue in the near term. Input price inflation slowed this month, which boosted company confidence. The strength in the services PMI contrasts with rising signals of a slowdown in the manufacturing sector."

Manufacturing PMI Reaches a 12-month Low

India's manufacturing PMI for December 2024 dropped to a 12-month low of 56.4. The decline was linked to lower rates of production expansion and new business orders. The lowest manufacturing PMI in 2024 was recorded in November and January 2024, at 56.5.

The PMI is a significant economic indicator based on a poll of business executives in key industries. It evaluates several areas of business operations, such as employment, production levels, new orders, supplier deliveries, and inventory levels. The replies are weighted and combined into a single index number, providing information about the health and trajectory of the services sector.

A PMI value above 50 suggests expansion, whilst a reading below 50 indicates contraction.