India’s services sector posted its strongest growth in 15 years in August, driven by robust demand and record-high new orders.
New Delhi
India’s services sector surged to its fastest pace of growth in 15 years in August, with the Purchasing Managers’ Index (PMI) rising to 62.9 from 60.5 in July, according to HSBC and S&P Global. The robust expansion was driven by strong domestic and international demand, efficiency gains, and a steady rise in new business orders, which grew for the 49th consecutive month at the sharpest rate since 2010.
Nearly 37% of service providers reported growth, while only 11% saw a decline. International sales contributed significantly, with export orders climbing at one of the strongest rates since 2014, particularly from the US, Europe, and West Asia. To meet rising demand, companies increased hiring, though most jobs were part-time. Higher labour costs, including salary hikes and overtime, pushed up both input and output prices, while some firms also reported increased transport and material costs.
Despite cost pressures, business confidence rose to a five-month high, supported by higher advertising budgets and expectations of sustained demand. Firms also anticipated taking on more work due to recent recruitment.
On the broader front, the composite PMI—which tracks both manufacturing and services—jumped to 63.2 in August, its highest in over 17 years, reflecting sharp and broad-based growth. Manufacturing activity also posted an impressive performance, with PMI hitting an 18-year high of 59.3, buoyed by strong domestic demand despite global trade headwinds.
Economists said the momentum highlights India’s resilient growth trajectory, underscoring the services sector’s central role in driving the economy forward.
