India's services sector expanded at its fastest pace in three months in September, but the quarterly growth picture remained the weakest in more than four years, according to the HSBC India Services PMI survey released on Tuesday.
The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 55.2 in September from 54.1 in August — its strongest reading since June — though it came in below the preliminary flash estimate of 55.8 released earlier. A reading above 50 indicates growth.
Domestic demand leads, exports cool
New business increased sharply in September at its quickest rate since June, with companies reporting higher demand for digital solutions, food, insurance, loans, software, transportation and tours and travel. Finance and insurance and consumer services recorded the strongest growth in both activity and sales.
International demand remained less buoyant: growth in new export orders eased to its weakest in nearly three years, suggesting domestic customers provided a firmer foundation for September's acceleration.
Weakest quarter since early 2022
Despite the September improvement, the pickup was not enough to lift the quarterly average: growth over the July-September quarter was the weakest since the January-March quarter of 2022, painting a less upbeat picture as hiring softened and export momentum weakened.
Employment growth eased from August, while input cost inflation fell to its lowest in 10 months. Business confidence improved to a three-month high but remained subdued historically — only around 16 per cent of firms expected activity to increase over the next year.
The services upturn, alongside manufacturing growth accelerating to its fastest since February, lifted the India Composite PMI to a three-month high of 55.9 in September from 54.3 in August.
Sources:
Reuters: India services growth at 3-month high, but quarter weakest since 2022, PMI shows
The Hindu BusinessLine: India services PMI rises to 55.2 in September
The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 55.2 in September from 54.1 in August — its strongest reading since June — though it came in below the preliminary flash estimate of 55.8 released earlier. A reading above 50 indicates growth.
Domestic demand leads, exports cool
New business increased sharply in September at its quickest rate since June, with companies reporting higher demand for digital solutions, food, insurance, loans, software, transportation and tours and travel. Finance and insurance and consumer services recorded the strongest growth in both activity and sales.
International demand remained less buoyant: growth in new export orders eased to its weakest in nearly three years, suggesting domestic customers provided a firmer foundation for September's acceleration.
Weakest quarter since early 2022
Despite the September improvement, the pickup was not enough to lift the quarterly average: growth over the July-September quarter was the weakest since the January-March quarter of 2022, painting a less upbeat picture as hiring softened and export momentum weakened.
Employment growth eased from August, while input cost inflation fell to its lowest in 10 months. Business confidence improved to a three-month high but remained subdued historically — only around 16 per cent of firms expected activity to increase over the next year.
The services upturn, alongside manufacturing growth accelerating to its fastest since February, lifted the India Composite PMI to a three-month high of 55.9 in September from 54.3 in August.
Sources:
Reuters: India services growth at 3-month high, but quarter weakest since 2022, PMI shows
The Hindu BusinessLine: India services PMI rises to 55.2 in September
