PMI Services Retreat In September On Softer New Business; Sector Remains Robust With Optimism At Six-Month High

India’s services sector growth moderated in September as the HSBC India Services Purchasing Managers’ Index (PMI) eased to 60.9 from a 15-year high of 62.9 in August, primarily due to slower expansion in new business and weaker overseas orders. Despite the retreat, the index stayed well above the 50-mark, signaling sustained robust growth in service activity.

 

Key Highlights

 

Business activity growth softened but remained the second highest in 13 months, supported by steady domestic demand and continued tech investments.

 

New export orders rose at the slowest pace since March, constrained by competitive pricing from international service providers.

 

Employment growth slowed with fewer than 5% of firms reporting hiring increases.

 

Inflationary pressures eased, with input costs and selling price increases hitting six-month lows.

 

Optimism for the year ahead improved to its highest level since March, fueled by expectations of tax cuts, efficiency gains, advertising campaigns, and competitive pricing strategies.

 

Outlook

The services sector continues to be a vital growth engine for India’s economy, maintaining momentum amid challenging external conditions and displaying resilience through improving business sentiment.

 

Sources: S&P Global, Reuters, Economic Times, Business Standard