India Services PMI Falls To Four-Year Low In July As New Business Growth Slows

India's services sector growth slowed in July, with the HSBC India Services PMI falling to its lowest level in more than four years as new business growth weakened and business confidence declined.

The Services PMI dropped to 53.3 in July from 57.4 in June, marking its lowest reading since February 2022. The Composite PMI, which tracks activity across services and manufacturing, declined to 54.3 from 57.1, its weakest level since March 2022.

The latest readings point to a loss of momentum across India's private sector, with new business recording its weakest expansion in nearly four-and-a-half years. International demand also softened from June, although export orders grew faster than overall new business.

Hiring Picks Up From Six-Month Low

Services companies increased hiring for the seventh straight month, with the pace of job creation picking up from a six-month low in June.

However, the increase remained modest. Most firms reported no change in headcount, while only a small proportion added employees.

Selling Prices Rise At Fastest Pace In Three Months

Input cost inflation eased for the fourth consecutive month and fell to its lowest level since January. Companies, however, raised selling prices at the fastest pace in three months as they passed additional cost pressures on to clients.

Business confidence also weakened, falling to a seven-month low and declining for a fourth consecutive month.

Firms nevertheless cited expectations of stronger demand and an increase in tourism as reasons for optimism about future business activity.

The Composite PMI's decline to 54.3 from 57.1 showed that the slowdown extended beyond services, with activity losing momentum across India's manufacturing and services sectors.

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