The Crossbill News Desk
India’s services sector gained momentum in September, with activity expanding at its fastest rate in three months as demand for financial, consumer and digital services strengthened.
However, the improvement was not enough to offset weaker growth over the July-September quarter, which recorded its softest performance in more than four years, according to a survey released on Tuesday, Reuters reported.
The HSBC India Services Purchasing Managers’ Index (PMI) increased to 55.2 in September from 54.1 in August. The reading, however, was below the preliminary estimate of 55.8. A reading above 50 indicates expansion in activity.
The latest figures pointed to a stronger month for the services economy, but also highlighted signs of moderation beneath the headline improvement. The average PMI for the July-September quarter fell to its lowest level since the quarter ended March 2022, reflecting slower hiring and a loss of momentum in overseas demand.
New business, considered an important indicator of demand, grew at its fastest pace since June. Much of the improvement was driven by domestic customers, as international demand remained comparatively weak. Growth in export orders slowed to its weakest level in almost three years.
The pace of job creation also moderated during the month, while companies faced relatively softer cost pressures. Input cost inflation fell to its lowest level in 10 months, and the increase in prices charged to customers slowed to its weakest pace since June.
Business sentiment improved to a three-month high in September, although overall confidence remained historically subdued. Only around 16% of firms surveyed expected business activity to increase over the coming year.
The services sector’s improvement coincided with stronger manufacturing activity. Manufacturing growth accelerated to its fastest pace since February, helping push the India Composite PMI to 55.9 in September from 54.3 in August.
Despite the recovery in both sectors during September, the composite reading also reflected the broader slowdown over the quarter.
Its July-September average was the weakest since January-March 2022, suggesting that the latest improvement in business activity has yet to translate into a sustained acceleration in overall private-sector growth.
However, the improvement was not enough to offset weaker growth over the July-September quarter, which recorded its softest performance in more than four years, according to a survey released on Tuesday, Reuters reported.
The HSBC India Services Purchasing Managers’ Index (PMI) increased to 55.2 in September from 54.1 in August. The reading, however, was below the preliminary estimate of 55.8. A reading above 50 indicates expansion in activity.
The latest figures pointed to a stronger month for the services economy, but also highlighted signs of moderation beneath the headline improvement. The average PMI for the July-September quarter fell to its lowest level since the quarter ended March 2022, reflecting slower hiring and a loss of momentum in overseas demand.
New business, considered an important indicator of demand, grew at its fastest pace since June. Much of the improvement was driven by domestic customers, as international demand remained comparatively weak. Growth in export orders slowed to its weakest level in almost three years.
The pace of job creation also moderated during the month, while companies faced relatively softer cost pressures. Input cost inflation fell to its lowest level in 10 months, and the increase in prices charged to customers slowed to its weakest pace since June.
Business sentiment improved to a three-month high in September, although overall confidence remained historically subdued. Only around 16% of firms surveyed expected business activity to increase over the coming year.
The services sector’s improvement coincided with stronger manufacturing activity. Manufacturing growth accelerated to its fastest pace since February, helping push the India Composite PMI to 55.9 in September from 54.3 in August.
Despite the recovery in both sectors during September, the composite reading also reflected the broader slowdown over the quarter.
Its July-September average was the weakest since January-March 2022, suggesting that the latest improvement in business activity has yet to translate into a sustained acceleration in overall private-sector growth.
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