September 4, 2024
The HSBC India Services Business Activity Index climbed to 60.9, up from 60.3 in July, reflecting the fastest expansion since March
Input costs rose at their slowest pace in six months, leading to a decrease in output price inflation
The outlook for the Indian private sector over the next year has moderated, reaching its lowest level in 15 months due to competitive pressures
Employment levels in the services sector remained strong, with job creation supported by confidence in future business activity and rising backlogs
India’s services sector experienced a significant growth surge in August, reaching a five-month high due to a notable rise in new work orders. According to a monthly survey released on Wednesday, companies also saw solid payroll increases as they maintained an optimistic outlook on the economy.
The seasonally adjusted HSBC India Services Business Activity Index increased to 60.9 in August from 60.3 in July, marking the fastest expansion since March. Productivity improvements and favourable demand trends mainly drove this growth.
In PMI terminology, a reading above 50 indicates expansion, while below 50 signals contraction. The survey noted that the Composite PMI for India continued to demonstrate strong growth in August, with the service sector experiencing its fastest expansion since March, primarily due to an uptick in new domestic orders.
On the pricing front, input costs increased slowly in six months, contributing to decreased output price inflation. The survey highlighted that the rate of charge inflation across India’s service economy was moderate and slower compared to July.
Despite these positive trends, the outlook for the Indian private sector over the next year has cooled, reaching its lowest point in 15 months due to competitive pressures. Nevertheless, the Future Output Index remains above the long-term average.
Employment levels in the services sector remained robust, although the pace of hiring slightly decreased from July. The survey attributed continued job creation to strong confidence in future business activity, rising backlogs, and sustained new business growth.
The HSBC India Composite Output Index, which measures the combined performance of manufacturing and services, held steady at 60.7 in August. This stability was due to accelerated growth in services offsetting a slowdown in manufacturing. The survey also reported that inflation for goods and services rose slower than in July, with cost pressures easing for both sectors.
Source: New Indian Express