August’s PMI indicates that India’s services sector growth accelerated to a five-month high.
August saw a five-month high for activity in India’s services sector, as measured by the HSBC Services PMI, which reached 60.9.
According to a study, August saw the greatest growth in the country’s leading services sector in five months as demand held steady despite decreasing inflationary pressures.
The S&P Global-compiled HSBC final India Services Purchasing Managers’ Index increased to 60.9 in August from 60.3 in July, above a preliminary estimate of 60.4.
The measurement was above the long-run average and represented the highest level since March. It has exceeded the 50-point threshold that separates expansion from contraction since August 2021.
According to Pranjul Bhandari, chief India economist at HSBC, “an increase in new orders, particularly domestic orders, was largely fuelled this growth.”
The new business sub-index was above its historical average and increased marginally from July to a four-month high.
Although there was strong demand abroad as well, the rate of increase slowed significantly in July, reaching a six-month low.
In a similar vein, business confidence dropped to its lowest level in almost a year in August, although continuing to trend upward. Businesses anticipated stronger growth in the upcoming year and were upbeat about the durability of demand.
Although slowing to its lowest level since April, hiring in the services sector was still growing at a strong rate.
Cost pressures increased somewhat last month due to rising labor, food, and transportation expenses; however, the growth experienced by service providers decreased to a level not seen in four years.
Positively, input costs increased at the slowest rate in the last six months, showing a similar pattern in both the manufacturing and service sectors. As a result, the inflation of output prices decreased in August,” Bhandari continued.
Firms passed on expenses to clients at a far slower rate than in July as inflationary pressure eased.
