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India’s services sector growth eased in the month of November, impacted by slowdown in new orders and output along with prices pressures. Input costs rose to the greatest extent in 15 months, while selling prices increased at the fastest rate in close to 12 years. Besides, total sales increased at a softer pace than in October, but the respective seasonally adjusted index was nevertheless more than four points above its long-run average and consistent with robust growth.

According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index eased to 58.4 in November from 58.5 in October. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also slowed down to 58.6 in November as against 59.1 in October. The report noted that service providers signaled sharper cost pressures than manufacturers, and subsequently recorded the steeper increase in selling prices.

To accommodate for rising intakes of new business, services firms continued to expand their operating capacities through recruitment drives. Besides, service companies in India observed another upturn in business expenses midway through the third fiscal quarter, amid higher food and labour costs. The rate of inflation was sharp, the strongest in 15 months and above its long-run average.

Meanwhile, service providers were more confident regarding the year-ahead outlook for business activity. Confidence reached its highest level since May, boosted by predictions of continued demand strength and expectations that marketing efforts will drive new business.