Defying the trend seen in the manufacturing sector, India’s Services PMI saw an uptick, reaching 60.9 in August, a better performance following July’s 60.3.
This increase indicates the most significant expansion since March, substantially surpassing the long-term average.
According to a report by S&P Global, the growth was largely driven by productivity gains and sustained positive demand, particularly in the domestic market.
Although new export business growth slowed to a six-month low, the rise in total sales remained notable, fueled by improved demand from key regions including Asia, Australia, Europe, Latin America, the Middle East, and the US.
Among the four sub-sectors tracked, Consumer Services saw the steepest rise in input costs in August. Meanwhile, charge inflation was most pronounced in Transport, Information, and Communication sectors. Despite these pressures, output charge inflation eased, supported by the retreat of cost pressures to their lowest level in four years.
Finance & Insurance as the best performing area of India’s service economy regarding both output and new business.
Pranjul Bhandari, Chief India Economist at HSBC, highlighted a key positive development, “Input costs rose at their slowest pace in six months across both manufacturing and services sectors, which led to a deceleration in output price inflation.”
However, the competitive pressures have moderated the growth outlook, bringing the Future Output Index to its lowest in 15 months, although it still remains above the long-term average, Bhandari added.
The HSBC India Composite Output Index, which measures private sector output, held steady at 60.7 in August, matching July’s figure.
