New Delhi, Aug 6: The services sector in India saw the slowest pace of expansion in more than four years in July, falling to 53.3 from 57.4 in June, according to HSBC India Services Purchasing Managers’ Index (PMI).
Softer client demand and intense competition curbed business activity and new order growth, the survey found.
The latest PMI survey points to a broader loss of momentum in India’s private sector after manufacturing activity also slowed in July.
Business activity, new orders and sentiment weakened, although export demand and employment continued to provide support. The services reading was revised marginally higher from the flash estimate of 53.1.
The pace of growth in business activity eased sharply during the month as companies reported weaker customer demand, fewer new enquiries and increasingly competitive market conditions.
New business expanded at its weakest pace since February 2022, reflecting softer domestic demand.
Business optimism slipped to a seven-month low in July as firms turned more cautious about the near-term demand outlook. Survey participants nevertheless remained optimistic that improving market conditions and stronger customer demand would support activity over the coming year.
However, overseas demand remained comparatively resilient, with firms reporting stronger export orders from key markets including the UAE, the UK and the US.
Input cost inflation softened to its lowest level since January, offering some relief to service providers.
Even so, companies raised selling prices at the fastest pace since April, firms increased selling prices despite easing input cost inflation. (BVI)
