India’s Services Sector Experiences Slight Slowdown

India’s Services Sector Experiences Slight Slowdown

Context: India’s services sector growth, as per HSBC India Services Purchasing Managers’ Index (PMI), eased to a five-month low in May due to stiff competition, price pressures, and a severe heatwave.

• It is compiled by S&P Global (earlier by IHS Markit). The PMI is an investor sentiment tracking index.
• Despite the decline, the PMI remained above the 50-mark threshold, indicating continued expansion.
• New international orders have surged due to rising sales, productivity gains, and robust demand.
• The HSBC India Composite PMI Output Index, which measures aggregate output across both manufacturing and service sectors, also declined to 60.5 in May from 61.5 in April.
• The service PMI serves as a crucial economic health indicator.