India's services growth rises to 3-month high
What's the story
India's services sector witnessed its fastest growth in three months in September, according to the latest HSBC Services Purchasing Managers' Index (PMI). The index rose to 55.2 from August's 54.1, driven by strong domestic demand for financial, consumer and digital services. A reading above 50 indicates growth. However, despite the monthly surge, the July-September average is now at its lowest since the quarter ended March 2022 due to softer hiring and export momentum.
Demand dynamics
Domestic demand drives growth
The new business, a key indicator of demand, witnessed its fastest growth since June.
However, international demand was weaker with export order growth slowing to its lowest in nearly three years.
This indicates that domestic customers were the main contributors to September's growth.
On the employment front, hiring slowed down from August levels.
Economic indicators
Business confidence improves to 3-month high
Input cost inflation was at its lowest in 10 months, while fees charged to customers increased at their slowest pace since June.
Business confidence also improved to a three-month high but remained historically subdued, with only around 16% of firms expecting an increase in activity over the next year.
The Composite PMI, which combines Services and Manufacturing PMIs, rose to a three-month high of 55.9 in September from August's 54.3, indicating moderate recovery.