India Services PMI Hits Three-Month High of 55.2 in Sept

India’s services sector expanded further in the month of September, with the seasonally adjusted HSBC India Services PMI Business Activity Index rising to 55.2 from 54.1 in August.

Growth Drivers and Sector Performance

Growth accelerated to a three-month high as demand conditions remained supportive and new business rose at the fastest pace since June.

• Finance and insurance recorded the strongest expansions.
• Consumer services also posted robust gains in activity and sales.
• New orders increased sharply at the fastest rate in three months.

Employment and Input Costs

Input-cost pressures on service providers eased to a 10-month low, which reduced the need to raise selling prices during the month.

• Employment rose at a moderate rate, losing momentum from August.
• Softer recruitment was largely attributable to real estate and business services firms.
• Outstanding business volumes increased after falling in the previous two months at a marginal rate.

Composite Output and Outlook

International demand improved, though the growth of new export business eased to a moderate pace that was the slowest in close to three years.

• The HSBC India Composite PMI Output Index increased to 55.9 in September from 54.3 in August.
• Private sector output recorded its strongest upturn since June.
• The average for the second fiscal quarter was the lowest since the three months to March 2022.

Indian services companies remained optimistic about the year ahead, supported by resilient demand and rising customer enquiries.