India's service sector experienced significant growth in July, driven by favorable demand conditions, according to the latest survey data released by S&P Global on Monday.
The seasonally adjusted HSBC Services Purchasing Managers' Index (PMI) slightly declined to 60.3 in July, down from 60.5 in June. Despite this minor drop, a PMI score above 50 still signals expansion in the sector. The preliminary ("flash") score for July was higher at 61.1.
The robust increase in overall output was attributed to a sharp rise in new orders, fueled by strong demand, increased tech investments, and a growing online presence. Export orders also surged at an accelerated rate, with notable demand from Austria, Brazil, China, Japan, Singapore, the Netherlands, and the United States.
In terms of pricing, cost pressures remained elevated in July due to increased labor and raw material costs. Consequently, firms raised their selling prices at the fastest rate seen in seven years.
Indian service providers remained optimistic about growth prospects over the next twelve months. Confidence in future demand and sales, coupled with improved customer engagement and an influx of new inquiries, bolstered this positive outlook.
The favorable economic conditions and positive expectations for output underpinned recruitment efforts among service firms, leading to one of the strongest rates of job creation observed in nearly two years.
The Composite Output Index, which measures activity in both the manufacturing and service sectors, registered at 60.7 in July, slightly lower than June’s 60.9. This indicates a continued strong growth momentum in India's private sector, largely driven by the manufacturing industry.
