India’s services sector had a strong year at the end of 2024, according to a poll, as demand pushed activity to a four-month high and inflationary pressures eased, contributing to strong hiring in December.

At its highest level since August, S&P Global’s HSBC final India Services Purchasing Managers’ Index rose from 58.4 in November to 59.3 in December, but it fell short of the initial forecast of 60.8.

The activity in this industry has been growing for over three years. It uses a 50-mark to distinguish between growth and shrinkage.

The new business sub-index, which gauged demand, grew at its fastest pace in four months. It was also in high demand around the world.

Strong demand and expanded capacity kept everyone optimistic about the future year. Despite falling short of the six-month peak in November, business optimism held steady and was higher than the year-over-year average.

Strong hiring was a result of growing company confidence. Businesses have continued to hire at one of the fastest rates since the poll’s inception in 2005. However, it decelerated from its 19-year peak in November.

When the sub-indices of input prices and prices charged both decreased, inflationary pressures decreased. Although they had dropped from their 15-month peak in November, input costs remained high as companies increased their expenditures on labour, food, and supplies.

Some of the higher expenses were passed on to customers by service providers, albeit more slowly than in November when it hit a nearly 12-year high.

A strong increase in services activity offset a decline in manufacturing growth, bringing the Composite PMI up to 59.2 last month from 58.6 in November.

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