HSBC Service PMI For January 2013 Zooms Higher To 57.5

HSBC, today, came out with its Services PMI data which was on a positive front. Seasonally adjusted HSBC Services Business Activity Index stood at 57.5 in the month of January 2013, which is higher by 190 basis points from the previous month (December 2012 stood at 55.6). According to the press release, this was after the business activity increased in tandem with rising volumes of incoming new work.

The numbers came in on a higher side, majorly after new orders in the private sector stood at an 11- month high, business activity expanded at the fastest pace in the last 12 months and private sector employment increases for a consecutive eleventh month.

Commenting on the data released, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said, “Service sector activity continued to pick up pace, led by a faster inflow of new business. With stepped up hiring, companies broadly managed to contain the rise in backlogs of work. Inflation readings held broadly steady, with fuel, raw material and labour cost pressures still simmering. These numbers underscore the need for the RBI to approach policy easing with caution.”

Overall, we believe that the sentiments are improving in the economy. The Government has put an end to policy paralysis with some of the major reforms in the past six months, which is expected to drive India's growth back on the fast track. The Reserve Bank of India (RBI) has also joined hands with the government to put back our economy on the growth path. It slashed the much awaited repo rate by 25 basis points to 7.75% on January 29, 2013 at the monetary policy meet and this is expected to spur the corporate capex plans gradually going ahead.

There are dozens of positive flows at present and now all eyes are on the Finance Minister's Budget (2013-2014) on February 28, 2013. Nevertheless, we would be updating our readers on the same on our website.