HSBC India Services PMI Number For Dec 2012 At 55.6

DSIJ Intelligence / 04 Jan 2013

The HSBC Services Business Activity number for Dec 2012 has come in at 55.6, which is much higher than 52.1 that that for the Nov 2012. This is a further indicator of the pick-up in the economy and a revival of growth.

Adding to the cheer on D-Street, HSBC has come out with higher Services Business Activity data for India for the month of Dec 2012. This number stands at 55.6, which is much better than that of 52.1 for Nov 2012. (A PMI reading above 50 indicates growth and one below 50 indicates contraction.)

Services activity was on the decline in the past couple of months and was posing a serious concern to the growth dynamics of the Indian economy. This is because the country’s service industry accounts for more almost 60% of its GDP and has been responsible for three-fourth of the GDP growth since FY09. This increase will definitely help to boost the country’s GDP growth rate.

The sharp rise in services offered by the private sector, which was highest in 10 months coupled with a good growth seen in the new orders, lead the Dec 2012 services activity numbers to come on the higher side. As stated in press release about the data, Leif Eskesen, Chief Economist for India & ASEAN at HSBC, said that the services sector provided some holiday cheer, with activity fully recovering after two months of deceleration led by a sharp rise in new business.

We believe that a rise in the number is a further indicator of the pick-up in the economy and a revival of growth. Earlier, the HSBC PMI manufacturing data also came in on the higher side (Dec 2012 stood at 54.7, which is higher by 100 basis points on a month-on-month basis), which also indicated some strength in the economy. To read more on this, refer to our previously posted article ‘PMI Data Hints At Optimism’.

The data for China also came in on the higher end. The HSBC China Composite Output Index figure for in Dec 2012 came in at 51.8, up from 51.6 in Nov 2012. For the same period, the Euro zone services activity number rose to 47.2 from 46.5 in Nov 2012. Germany saw growth, while countries like France, Italy and Spain continued to witness a contraction in their services business.

All of these are sureshot pointers that things are improving across the globe and that world growth will pick up gradually in 2013.

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