India’s services activity accelerated in October as domestic demand strengthened and cost increases slowed, though weaker growth in export orders and hiring tempered the improvement for businesses and workers.
The final HSBC India Services PMI Business Activity Index, compiled by S&P Global, rose to 55.8 from 55.2 in September. The October reading was the highest since June, although it fell short of the preliminary estimate of 56.2. A reading above 50 indicates an increase in activity from the previous month.
Service providers continued to face higher input costs, but those costs rose at their slowest rate since August 2020. Prices charged to customers also increased more slowly. The findings point to easing price pressure, rather than a decline in costs or selling prices.
Domestic demand drove the strongest increase in new business since June. Finance and Insurance outpaced the other three service categories measured, Business Standard reported. The stronger order flow was concentrated at home: export orders increased at their weakest rate since February 2023.
Hiring continued to rise, but its pace matched the June low. That left employment growth trailing the improvement in overall services activity. Business Standard also reported that fewer than 3% of firms surveyed charged customers more in October.
S&P Global’s published methodology says the services survey covers about 400 companies. Its activity index measures the direction of change from one month to the next; a reading of 55.8 does not mean output grew 55.8%.
The final data follow an earlier flash survey showing stronger private-sector activity in October. The HSBC India Composite PMI Output Index, which combines manufacturing and services, rose to 56.2 from 55.9 in September.
