India's services sector growth lowest since November 2023, show PMI data
Oct 04, 2024
New Delhi [India], October 4 : Services sector growth in India, in terms of new business, international sales and output, rose at the slowest rates since November 2023, HSBC India Services PMI showed on Friday.
The key measures of sectoral performance tracked by the HSBC India Services PMI survey, compiled by S&P Global, continued to point to historically strong rates of expansion.
The index value was above the neutral mark of 50.0 in September. Falling from 60.9 in August to 57.7, the headline figure signalled a softer, albeit still historically-robust rate of expansion.
The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.
One factor that constrained total sales growth was a softer increase in new export orders. The rate of expansion moderated to the weakest in 2024 so far. Still, some firms noted gains from Asia, Europe, North America, the Middle East, and the US.
"The new business index followed a similar trajectory as the headline figure, indicating the possibility of softer output growth in the coming months. Services companies' margins have likely been squeezed further, as prices charged rose at a slower pace when input cost inflation intensified. A long period of robust new business growth has led to strong labour demand," said Pranjul Bhandari, Chief India Economist at HSBC.
Separately, India's manufacturing sector also slipped for second consecutive month in September, PMI data showed earlier.
The moderation in growth reflects a broader trend in the second fiscal India's manufacturing sector slips for second consecutive month in September quarter, with the average PMI reading hitting its lowest level since the three months ending December 2023.
The slowdown was attributed to several factors, including fierce competition and a softer increase in new export orders. While demand trends remained positive, the pace of expansion was constrained.
