India’s services sector grew faster in February, driven by strong demand and a positive business outlook, leading to increased hiring.

The economy expanded 6.2% year-over-year last quarter, supported by government and consumer spending. The government expects 6.5% growth for the full financial year, aided by improving urban consumption.

HSBC’s India Services PMI rose to 59.0 in February from January’s 26-month low of 56.5, staying above the 50-mark that separates expansion from contraction since mid-2021.

Global demand grew fastest in six months, boosting services activity, while foreign orders reached a six-month high.

Service firms remained optimistic about the next 12 months despite a slight dip in sentiment. Rising demand led to strong hiring.

Cost price inflation eased to a four-month low, but firms raised prices, leading to higher charge inflation.

Stronger services growth helped offset weaker manufacturing, lifting the Composite PMI to 58.8 in February from 57.7 in January.

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