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Indian service providers maintained a strong rate of output expansion in October, with growth recovering from September's ten-month low, which also led to the creation of more jobs during the month, according to HSBC's survey released on Wednesday. 

Participants of the HSBC India Services PMI survey, conducted by S&P Global, commonly cited healthy customer demand domestically and from abroad. In response to positive sales developments, and optimism regarding near-term prospects, firms recruited extra workers to the greatest degree in just over two years, according to the report.

Pranjul Bhandari, Chief India Economist at HSBC, said: "India's services PMI recovered from its ten-month low in September to reach 58.5 last month. During October, the Indian services sector experienced strong expansions in output and consumer demand, as well as job creation, which achieved a 26-month high."

The rate of sales growth was historically elevated and accelerated from September's ten-month low, the survey states.

Latest data also highlighted a recovery in the growth of new export sales across India's service economy, which survey respondents attributed to strengthening demand from clients in Africa, Asia, the Americas, the Middle East and the UK.

October saw a marked expansion in services employment, one that was the quickest for 26 months. Around 13 per cent of panellists reported job creation, compared to 9 per cent in September.

Anecdotal evidence showed that a sustained improvement in new business induced firms to hire more hands, the survey added.

Input costs increased at the strongest pace for three months in October. Higher business expenses were largely attributed to rising wage bills and food costs. Efforts to pass these on to clients meant that selling charges were hiked again, it added.

Robust sales pipelines and strong demand conditions supported the upturn in business activity

The seasonally adjusted HSBC India Services Business Activity Index is based on a single question asking how the level of business activity compares with the situation the month before. Rising from 57.7 in September to 58.5 in October, the headline figure was consistent with a sharp and accelerated rate of growth that outpaced its long-run average (54.1).