New Delhi
India’s services sector saw strong growth in August, with the Services Business Activity Index reaching 60.9. This marked the sector’s strongest expansion since March. The index has remained in expansion for thirty-seven consecutive months, reflecting ongoing momentum driven by productivity improvements and steady demand.
In August, the index increased from 60.3 in July, staying above the long-run average. The services sector experienced its fastest expansion since March, with new orders continuing to rise for the thirty-seventh month in a row. The rate of new order growth slightly accelerated from July, reaching its highest level since April. Over one-quarter of companies reported improved business conditions, while only 5 per cent noted a decline.
New orders, particularly domestic, were the primary drivers of growth. Employment levels remained steady, although there was a slight decrease in hiring compared to July. Input costs rose at their slowest pace in six months, resulting in a decrease in output price inflation in August.
Finance and insurance emerged as the best-performing sub-sector, showing the highest growth in both output and new business. New export business increased at a slower pace in August, easing to a six-month low. Despite this, export orders saw significant growth.
Confidence in future business activity remained positive, supported by sustained new business growth, although business confidence for the year ahead dropped to a 13-month low due to competitive pressures.
