NEW DELHI — India's dominant services sector expanded at its quickest pace in four months in October as improved domestic demand boosted new business, although hiring turned subdued as international orders weakened, a survey showed on Wednesday, Reuters reported via The Hindu BusinessLine. The HSBC India Services Purchasing Managers' Index (PMI), compiled by S&P Global from responses from purchasing managers at about 400 firms, rose to 55.8 from September's 55.2, but was below a preliminary estimate of 56.2. A reading above 50.0 shows growth. This final reading replaces the earlier flash survey published on October 23, which had put services at 56.2 and the composite index at 56.7 — the final numbers confirm the four-month-high pace, at a slightly softer level than the flash suggested.

Source: Reuters via The Hindu BusinessLine

Demand buoyancy fuelled growth of business activity and new orders across India's service economy in October, IANS reported, noting that the services PMI was comfortably above the neutral mark of 50.0 and its long-run average. New business — a key gauge of demand — increased at its fastest rate since June mainly because of strong domestic orders, Reuters reported. All four broad areas of the service economy tracked by the survey recorded quicker expansions in new business and output, with growth led by Finance and Insurance in both cases and Real Estate and Business Services last in the rankings, IANS reported.

Source: IANS

"India's services PMI rose to 55.8 in October, a four-month high, as business conditions improved cautiously. Although overall demand remained fairly strong, new export orders recorded the slowest pace of expansion since February 2023," Pranjul Bhandari, Chief India Economist at HSBC, said, in comments reported by IANS. Reuters put the same weakness slightly differently, reporting that growth in new export business matched its weakest pace in 45 months. The domestic market was the main source of sales growth in October, both reports said.

Source: IANS

The softer spots were jobs and costs. Employment growth almost stalled, with hiring matching the pace in June — the slowest pace in 10 months — Reuters reported, while IANS noted that services companies made inroads into their backlogs, with unfinished business falling for the third time in four months, and employment growth consequently eased. On prices, input cost inflation retreated to its lowest mark since August 2020, IANS reported, and prices charged for Indian services rose at the weakest rate since June. Business confidence slipped from September and stayed below its long-run average, Reuters reported, signalling cautious optimism, even as service providers remained confident of a rise in output over the coming 12 months, IANS reported. Sources: Reuters via The Hindu BusinessLine, IANS, The Hindu BusinessLine.

Source: The Hindu BusinessLine