India's services PMI at 53.3 in July; export demand, hiring remain supportive
New Delhi, Aug 5
India's services sector remained in expansion territory in July due to healthy export demand and continued hiring, according to the HSBC India Services PMI data released on Wednesday.
The seasonally adjusted HSBC India Services PMI Business Activity Index came in at 53.3 in July from 57.4 in June, remaining above the 50-mark that separates growth from contraction.
Meanwhile, service providers continued to report growth in activity with strong overseas demand emerging as a key support factor.
Companies cited improved business from clients in the UAE, the UK and the US, helping new export orders grow at a faster pace than overall new business.
The data also highlighted that new business inflows expanded for another month, although the pace of growth slowed to its weakest level since February 2022 as firms reported softer demand conditions, intense competition and fewer customer enquiries.
Hiring activity improved from June's six-month low, with service providers continuing to expand their workforce. While the increase in employment remained modest, stronger hiring in services helped boost overall job creation across the private sector.
"India's services sector continued to expand in July, albeit at a slightly slower pace, as new business growth eased in both domestic and export markets after several months of strong performance. Hiring showed a moderate rebound, while profit margins improved as input costs softened and firms increased their selling prices," said Pranjul Bhandari, Chief India Economist at HSBC.
According to the latest data by HSBC, input cost inflation softened to a six-month low and remained below the long-run average despite higher fuel, labour, material, technology and transportation expenses.
At the same time, firms increased selling prices at the fastest pace since April, supporting margins.
In addition, business sentiment remained positive aided by expectations of improved demand, better market conditions and higher inbound tourism. However, overall optimism eased to a seven-month low.
Additionally, the HSBC India Composite PMI Output Index -- which tracks both manufacturing and services activity -- stood at 54.3 in July showing continued expansion in private-sector activity.
— IANS
Reader Comments
Good to see export demand from UAE, UK, and US is strong! India's services sector is really making a mark globally. The fact that we are hiring more despite global headwinds is a positive sign for young graduates. 🙌
The slowdown from 57.4 to 53.3 is quite noticeable. I work in IT services, and I can feel the competition intensifying from lower-cost providers and slower client decision-making. The export boost is helping, but I hope domestic demand picks up soon.
Input costs softening is a relief! With fuel and transportation costs going up, my company was worried about margins. But the fact that we can now raise prices a bit without losing clients (thanks to quality service) is a good balance. Let's hope the momentum continues! 📈
One thing I noticed is the weaker new business growth since Feb 2022. This shows the global uncertainty is affecting us too. But India still being above 50 is a testament to our resilience. At least hiring is still happening for freshers, which is crucial.
As someone who moved from US to India for work, I can see the difference in energy here. The services sector is buzzing, especially in tech hubs. It's great to see domestic firms expanding and not just outsourcing centers, but real innovation hubs. Keep it up India! 🇮🇳
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