“Employment rose for the thirty-seventh consecutive month in June, with the rate of job growth outpacing its long-run average despite slowing from May’s record,” S&P Global reported.
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Following strong performance in manufacturing, the services sector also fared well in June as Purchasing Managers’ Index (PMI) surged to a 10-month high of 60.4 in June, S&P Global reported on Thursday. Expansion in sales and business activity pushed the PMI upward. However, job creation slowed during the month under consideration.
The services sector contributes over 50 per cent to the Gross Value Added (GVA).
“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,” said Pranjul Bhandari, Chief India Economist at HSBC.
PMI is derived on the basis of responses from purchasing executives of 400 companies. A reading above 50 indicates expansion, while index below 50 indicates contraction.
In terms of job creation, S&P Global report noted that the ongoing expansion of the Indian service sector had a positive impact on recruitment. “Employment rose for the thirty-seventh consecutive month in June, with the rate of job growth outpacing its long-run average despite slowing from May’s record,” it said.
Sector-wise data indicated broad-based expansion in output and new orders during June. Once again, finance and insurance topped the growth rankings, while real estate and business services saw the slowest expansions in both areas.
On the issue of price, the report said that the rate of input cost inflation across India’s service economy eased to a 10-month low in June, falling below its long-run average. Where expenses increased, panel members commonly cited greater staff salaries and wages. Several service providers noted that they had maintained sufficient pricing power to pass on higher costs to clients. Despite easing from May, the rate of charge inflation remained above the series trend. “Cost pressures were most intense in the Consumer Services category, while the fastest upturn in output charges was noted in the Finance & Insurance segment,” it said.
As far the outlook, the report noted that 18 per cent of service providers anticipated growth. This proportion of upbeat firms was, however, the lowest since mid-2022. Hence, the overall level of confidence fell and was below its long-run average. “Service providers remained optimistic about future growth, though their confidence faded a tad,” Bhandari said.
On Tuesday, S&P Global reported that the PMI Manufacturing in June 2025 jumped to 14 months high of 58.4 in June. This indicates a 14-month high in manufacturing activity, fuelled by strong export orders.
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Published on July 3, 2025
