India services growth hits four-and-a-half-year low in July on weak demand: PMI

The Story in Brief

India’s services sector growth slowed to a four-and-a-half-year low in July, as the HSBC India Services PMI Business Activity Index fell to 53.3 from 57.4 in June. The survey said business activity rose at the weakest rate in 53 months, with new business inflows expanding only moderately-the slowest since February 2022. Panellists cited fierce competition, fading demand, softer market conditions and order postponements as constraints in both domestic and export markets. New export business was a bright spot, with firms reporting gains from the UAE, UK and US. Employment showed a modest improvement after a six-month low in June: 6% of firms reported higher payrolls while 92% saw no change. July data also signalled higher input costs across services, including fuel, labour, material, technology and transportation, even as firms increased selling prices and reported improved profit margins. The HSBC India Composite PMI fell from 57.1 to 54.3, the weakest composite expansion since March 2022.

The Indian Opinion

Readers should note the PMI remains above 50, so the surveys point to continued expansion despite the slowdown. Labels such as “four-and-a-half-year low” and “weakest growth” can sound alarming, but they describe slower growth rates versus past months rather than a contraction. The PMI is survey-based, compiled from responses by around 400 service firms, and reflects perceptions of orders, costs and hiring; panellists’ remarks about competition or postponed orders are not quantified in the article. That means some caution is warranted before extrapolating these monthly readings to the whole economy. Mention of export gains and easing input-cost inflation at the composite level are positive signals, but the article does not provide magnitudes for those trends.

Original article: India’s services sector growth hits four-and-a-half-year low in July on weak demand: PMI (www.thehindu.com)

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