India’s services sector expanded further in the month of August, as demand conditions remained supportive and new business inflows continued to rise. Although growth of output and sales strengthened since July, rates of expansion were however still among the weakest seen in over four years. Firms nevertheless continued to hire, with job creation reaching a 15-month high, while price pressures picked up only modestly.
According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index rose to 54.1 in August from 53.3 in July. New business increased more quickly, helped by stronger customer demand and marketing initiatives. However, the pace of expansion was still the second-slowest in nearly four-and-a-half years, amid challenging market conditions and weaker client interest in selected services.
International demand continued to support growth. New export orders rose solidly and at a similar rate to July, with companies reporting gains from clients in markets including Australia, Brazil, Canada, Japan, Malaysia, Singapore, Sri Lanka and the UAE. Even so, the upturn in export sales remained below the average seen over the past year. Outstanding business fell for the second month running, though only marginally. However, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- remained unchanged at 54.3 in August, same reading as in July.
