India’s services growth eases in September as demand cools:PMI

India’s services sector growth slowed in September due to weaker overseas demand, though overall business activity remained strong and optimism among firms improved, a private survey showed on Monday.The HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 60.9 in September from a 15-year high of 62.9 in August, slightly below the flash estimate of 61.6. Despite the moderation, the latest reading marked the second-highest expansion in 13 months, remaining well above the 50-point threshold that separates growth from contraction.
Firms attributed the sustained momentum to resilient domestic demand and ongoing investment in technology, even as they faced rising competition and tighter cost-control measures. The new business sub-index also softened but continued to signal strong expansion, recording its second-fastest growth since August 2024.However, international demand weakened noticeably, with export orders rising at the slowest pace since March, as price competition from global providers weighed on foreign sales,according to information.Still, business confidence for the year ahead rose to a six-month high, supported by expectations of stronger marketing efforts, operational efficiency gains, and potential tax relief. Employment, however, remained subdued, with fewer than 5% of surveyed firms reporting new hires.Cost pressures also eased, with both input and output prices increasing at a slower pace. Firms passed on higher costs to consumers at the mildest rate since March.
Commenting on the data, Pranjul Bhandari, Chief India Economist at HSBC, said, “Most trackers moderated, but nothing in the survey suggested a big loss in growth momentum in services.” She noted that the Future Activity Index climbed to its highest level since March, signaling improved optimism across the sector.Meanwhile, the HSBC India Composite PMI Output Index, which combines manufacturing and services, slipped to 61.0 in September from 63.2 in August, its lowest in three months but still indicative of strong overall expansion.India’s manufacturing PMI also eased to 57.7 from 59.3, pointing to a slower, yet solid improvement in business conditions. Analysts said that while both sectors moderated, India’s economic growth remains supported by steady domestic demand, policy stability, and positive business sentiment.

(Business Correspondent)