India`s services sector growth eases to 60.3 in July
India’s services sector growth eased during the month of July as higher wage and material costs continued to push up business expenses, with the overall rate of inflation quickening from June, however it remained above the neutral mark of 50.0 for the thirty-sixth straight month. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index eased to 60.3 in July from 60.5 in June. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also fell to 60.7 in July as against 60.9 in June.
The report noted that the rise in output reflected a sustained increase in sales volumes in July, amid buoyant demand, tech investment and a growing online presence. Total new orders expanded at a historically sharp pace. New export orders increased at the third-strongest pace since the inception of the series in September 2014, amid strengthening demand for Indian services from across the world. Some of the sources of rising export orders included Austria, Brazil, China, Japan, Singapore, the Netherlands and US.
However, a pick-up in cost pressures and stronger pipelines of new business encouraged firms to hike their selling prices again in July. The overall rate of charge inflation climbed to a seven-year high. Further, favourable economic conditions and optimistic expectations for output supported recruitment among services firms. The latest rise in employment levels was among the strongest in close to two years. Job creation was achieved via the hiring of full- and part-time staff.
