The survey said that strength in demand, increase in new orders and technology investment supported the activities. Service providers also hired additional staff due to better inflow of new business.

HSBC Chief India Economist Pranjul Bhandari said there was sustained momentum in the services sector in January. He said the strong growth in production was supported by domestic demand as well as growing international demand from South and South-East Asia.

Improvement in new orders and exports

According to the survey, new orders grew at the fastest pace in two months. The domestic market was the main driver, while international orders also grew strongly. Companies said they are getting new business from Indonesia, Kenya, Malaysia, Oman, Qatar, Sri Lanka, Thailand and Vietnam.

Business confidence reaches three-month high

Business confidence reached a three-month high. Improvement in efficiency, effective marketing and acquisition of new customers increased trust. Private sector job creation resumed in January after a pause in December, with both manufacturing and services registering modest gains.

prices under control

Input costs and selling prices did increase, but they remained moderate by historical standards. Cost pressure was greatest in consumer services, while the fastest increase in output charges was recorded in the finance and insurance sectors.

Composite PMI also strong

The HSBC India Composite PMI Output Index rose to 58.4 in January from an 11-month low of 57.8 in December. The composite PMI is a weighted average of both manufacturing and services indices and reflects the size of both sectors in GDP. According to Bhandari, the strength in the composite PMI indicates solid demand growth in both the sectors.