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BENGALURU, Aug 5 (Reuters) – Growth in India’s dominant services sector slumped to its weakest pace in over four years in July as demand was weighed down by fierce competition and fading client appetite, a survey showed.
- HSBC’s India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, fell sharply to 53.3 in July from June’s 57.4 but was slightly higher than a preliminary estimate of 53.1. PMI readings above 50.0 signal expansion in activity.
- New business – a key gauge for demand – rose only moderately, posting the softest expansion in close to four-and-a-half years.
- International demand also softened slightly from the previous month despite export orders outpacing growth in overall new business.
- Hiring picked up from a six-month low recorded in June, marking a seventh month of job creation. But the improvement was modest with a majority of firms reporting no change to headcount and only a small fraction adding staff.
- Input cost inflation eased for a fourth consecutive month, falling to its lowest since January. However, selling prices rose at their fastest pace in three months as firms passed additional cost burdens to clients.
- Business confidence slipped to a seven-month low, marking its fourth monthly decline, even though firms cited hopes of stronger demand and increased tourism.
- India’s Composite PMI, which measures activity across both services and manufacturing, fell to 54.3 in July from 57.1 – its weakest reading since March 2022, pointing to a broad-based loss of momentum across India’s private sector.
Reporting by Anant Chandak.
