India’s services sector recorded its fastest pace of growth in more than 14 years, with the HSBC India Services PMI Business Activity Index rising to 62.9 in August from 60.5 in July, according to the HSBC PMI survey report.
This marked the steepest rate of expansion since June 2010, reflecting a sharp surge in demand and business activity.
The report said, “HSBC India Services PMI Business Activity Index – based on a single question asking how the level of business activity compares with the situation the month before – rose from 60.5 in July to 62.9 in August, indicating the steepest rate of expansion since June 2010.”
The sharp increase highlights that India’s services economy benefited from a substantial improvement in demand during August. Both new orders and overall activity grew at their fastest pace in over 15 years.
International sales also showed strong momentum, with export growth marking the third-strongest increase since the series began in September 2014. Companies continued to expand their workforce, with robust job creation supporting the sector. While capacity was sufficient to meet requirements, outstanding business increased only marginally, alongside a modest uptick in employment.
On the cost front, firms reported higher expenses due to salary hikes and overtime payments. Input cost inflation rose to a nine-month high, prompting companies to increase output prices. Despite this, demand remained strong enough to absorb the hikes, leading to the steepest rise in output charges since July 2012.
The broader private sector also witnessed strong performance. The HSBC India Composite PMI Output Index, which tracks both manufacturing and services, climbed from 61.1 in July to 63.2 in August – reflecting the sharpest pace of expansion in more than 17 years.
The August data pointed to a broad-based pick-up in output across both services and manufacturing, with new business intakes rising to their highest level since mid-2010. The acceleration was particularly strong in services, while manufacturing maintained steady growth.
Aggregate employment across both sectors rose at a solid pace, stronger than in July. Services firms reported faster hiring activity, while manufacturing firms sustained stable growth.
Overall, the August PMI surveys indicated that India’s economy is being strongly supported by rising domestic demand, faster job creation, and robust growth across services and manufacturing.
(ANI)
