The Crossbill News Desk
India's services sector lost considerable momentum in July, with business activity expanding at its slowest pace in more than four years as weaker demand and intense market competition weighed on growth, according to the latest purchasing managers' survey, reported Reuters.
The HSBC India Services Purchasing Managers' Index (PMI), compiled by S&P Global, dropped sharply to 53.3 in July from 57.4 in June. Although the reading remained above the 50-mark that separates expansion from contraction, it was only marginally higher than the preliminary estimate of 53.1.
The slowdown was driven by softer demand conditions. New business, a key indicator of demand, recorded only moderate growth during the month, marking its weakest expansion in nearly four-and-a-half years. International demand also eased compared with June, although export orders continued to grow at a faster pace than overall new business.
Despite the moderation in activity, employment continued to rise. Hiring improved from the six-month low recorded in June, extending the current streak of job creation to seven months, the survey reported.
However, the pace of recruitment remained subdued, with most surveyed firms reporting no change in workforce size and only a small proportion adding new employees.
On the cost front, businesses received some relief as input price inflation slowed for the fourth consecutive month, reaching its lowest level since January. Even so, companies raised the prices charged to customers at the fastest pace in three months in an effort to offset higher operating costs.
Business sentiment also weakened during the month. Confidence among service providers fell to a seven-month low, marking the fourth straight monthly decline, although firms continued to express optimism that stronger demand and increased tourism would support activity in the months ahead.
The moderation was reflected across the broader private sector as well. India's Composite PMI, which combines performance in the services and manufacturing sectors, declined to 54.3 in July from 57.1 in June, its lowest reading since March 2022.
The HSBC India Services Purchasing Managers' Index (PMI), compiled by S&P Global, dropped sharply to 53.3 in July from 57.4 in June. Although the reading remained above the 50-mark that separates expansion from contraction, it was only marginally higher than the preliminary estimate of 53.1.
The slowdown was driven by softer demand conditions. New business, a key indicator of demand, recorded only moderate growth during the month, marking its weakest expansion in nearly four-and-a-half years. International demand also eased compared with June, although export orders continued to grow at a faster pace than overall new business.
Despite the moderation in activity, employment continued to rise. Hiring improved from the six-month low recorded in June, extending the current streak of job creation to seven months, the survey reported.
However, the pace of recruitment remained subdued, with most surveyed firms reporting no change in workforce size and only a small proportion adding new employees.
On the cost front, businesses received some relief as input price inflation slowed for the fourth consecutive month, reaching its lowest level since January. Even so, companies raised the prices charged to customers at the fastest pace in three months in an effort to offset higher operating costs.
Business sentiment also weakened during the month. Confidence among service providers fell to a seven-month low, marking the fourth straight monthly decline, although firms continued to express optimism that stronger demand and increased tourism would support activity in the months ahead.
The moderation was reflected across the broader private sector as well. India's Composite PMI, which combines performance in the services and manufacturing sectors, declined to 54.3 in July from 57.1 in June, its lowest reading since March 2022.
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