India Oct services growth fastest in a year: HSBC

India Oct services growth fastest in a year: HSBC

Mumbai: Business activity among Indian services companies climbed to its highest level in more than year in October as new work orders, activity and employment expanded at faster rates, a survey showed on Wednesday.

The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to a 13-month peak of 56.78 in October after having dropped to a three-month low of 54.37 in September.

The index has been above 50, which separates expansion from contraction, for six months. Before that, it shrank for six months, hitting a trough of 40.3 in February.

“At 56.8, the fairly brief history of this series suggests the service sector could be registering double-digit real growth in the not too distant future, compared with 7.7% in the April-June quarter," said Robert Prior-Wandesforde, senior Asian economist at HSBC.

“A strong rise in the expectations index, to what is now a very high level, also bodes well and it is good to see more employers planning to hire," he added.

The business expectations sub-index recorded its fastest expansion since March 2008, at 79.47 in October, compared with 74.82 in September.

Better market conditions, promotional strategies and good reputations were the main reasons for the increased confidence, the report said.

Manufacturing activity expanded for the seventh consecutive month in October, but at a slightly slower pace as growth in new orders and output slowed, a survey showed earlier this week.

The central bank expects the economy to grow at 6% or more in 2009-10, compared with last year’s 6.7%.