Services sector growth rate reached 11-month high in July
Delhi Delhi: Indian services sector growth rose to an 11-month high in July on the back of a surge in new export orders and a sharp rise in overall sales, a monthly survey released on Tuesday said. The seasonally adjusted HSBC India Services PMI Business Activity Index stood at 60.5 in July, slightly lower than June’s 60.4, and the rate of expansion was the best since August 2024.
In the language of the Purchasing Managers’ Index (PMI), a score above 50 indicates expansion, while a score below 50 indicates contraction. “At 60.5, the Services PMI indicated strong growth momentum led by a surge in new export orders,” said Pranjul Bhandari, chief India economist at HSBC. The survey said a sustained rise in new businesses has been the main driver of output growth. Indian service providers have also welcomed a strong recovery in international demand for their services. They reported that they received new jobs from Asia, Canada, Europe, the United Arab Emirates and the US.
Going forward, service providers remained optimistic on average about their expectations for output in the coming year. Factors boosting business confidence include increased efficiency, marketing, technological innovation and growing online presence, they said. On the prices front, input costs and output charges grew at faster rates than in June. “The solid increase in output prices reflected higher cost burdens and strength of demand,” the survey said.
“On the prices front, both input and output prices grew slightly faster than in June, but recent CPI and WPI data indicate that this may change going forward,” Bhandari said. Consumer Price Index (CPI)-based retail inflation has remained below 4 per cent since February. It was 2.1 per cent in June.
Wholesale price inflation (WPI) turned negative after a gap of 19 months, at 0.13 per cent in June. On the jobs front, although this uptick increased pressure on companies’ capacity, hiring was subdued. Employment growth in July was the slowest in 15 months. “The pace of job creation remained modest, roughly in line with the long-term average. Less than 2 percent of firms added additional workers,” the survey said.
