New Delhi, Sep 3: India’s services sector showed signs of improvement in August, with business activity gaining momentum and employment growth reaching its highest level in 15 months.
The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 54.1 in August from 53.3 in July. A reading above 50 indicates expansion in business activity.
The latest figures show that the sector continued to grow, supported by higher output and stronger new business during the month. However, the pace of expansion remained moderate compared with historical levels.
The August reading was the second-lowest since March 2022 and remained below the long-term average of 54.5. This indicates that the services sector is expanding but has yet to return to the stronger growth levels recorded in earlier periods.
Employment emerged as a key positive factor during the month. Service-sector companies increased hiring at the fastest pace in 15 months, suggesting that businesses are adding workers to meet demand and support their operations.
The improvement in new business and output also points to continued underlying demand across the services economy. However, the relatively modest PMI reading indicates that businesses remain cautious about the strength of the recovery.
Pranjul Bhandari, Chief India Economist at HSBC, said services activity strengthened in August as output and new business improved. She also noted that the overall pace of expansion remained among the weakest recorded in more than four years.
The services sector will continue to play an important role in India’s economic growth and employment outlook. Future PMI readings will be closely watched for signs of stronger demand and sustained business expansion.
Overall, the August data presents a cautiously positive picture. Activity improved, hiring strengthened and new business increased, although the overall pace of growth remains moderate.