New businesses drive services sector growth to 10-month high in June: PMI

Indian service providers end Q1 on a strong note, with output and new orders rising at the fastest pace since August 2024, supported by robust international sales & job creation, according to PMI data

Indian service providers ended the first quarter of the ongoing financial year 2026 (Q1FY26) on strong footing as output and new order intakes rose at the fastest rates since June of August 2024, aided by another robust expansion in international sales and job creation, said a private survey on Thursday.

 

The HSBC India services purchasing managers’ index (PMI), compiled by S&P Global, stood at 60.4 in June, up from 58.8 in May.

 

The index has been above the neutral 50 mark, which separates contraction from expansion, for 47 months straight.

 

“Monitored companies linked the upturn to positive demand trends and ongoing improvements in sales. Services companies benefited most from the continued strength of the domestic market, alongside a marked increase in new export business,” said the survey.

 

 

The survey noted that overseas demand particularly improved from the Asian, middle eastern and US markets, according to panel members.

 

The level of incoming new export orders rose at the slowest pace in three months halfway through the 2025 calendar year, albeit one that was among the strongest seen since this question entered the questionnaire in September 2014.

 

Pranjul Bhandari, chief India economist at HSBC, said that the services PMI business activity index was up to a ten-month high, led by a sharp rise in new domestic orders.

 

“New export orders also expanded, albeit at a softer pace. Margins improved, as the rise in input costs was below that seen for output charges. Service providers remained optimistic about future growth, though their confidence faded a tad,” she added.

 

Sector data indicated that expansions in output and new orders remained broad-based during June. Once again, finance & insurance topped the growth rankings. For both measures, the slowest expansions were in real estate and business services.

 

On the employment front, the survey noted that the ongoing expansion of the Indian service sector had a positive impact on recruitment as employment rose for the 37th consecutive month in June, with the rate of job growth outpacing its long-run average despite slowing from May’s record.

 

Month	PMI Services
June	60.5
July	60.3
August	60.9
September	57.7
October	58.5
November	58.4
December	59.3
January 2025	56.5
February	59
March	58.5
April	58.7
May	58.8
June	60.4
Source: HSBC