India's services index fell to 53.3 from 57.4, the weakest growth in 53 months, and 92 percent of the panel reported no change in headcount
The release and the economist quoted inside it describe the same month in different words. The title on page one reads that services growth slows markedly. The comment printed underneath it calls the pace slightly slower.
The number is a drop of 4.1 points. The HSBC India Services PMI business activity index fell to 53.3 in July from 57.4 in June, according to the release published at 10:30 in Mumbai on Wednesday. Anything above 50.0 signals expansion, so the sector grew, and it grew at the weakest rate in 53 months. New business inflows rose at the slowest pace since February 2022.
Panellists put it down to competition, fading demand, softer market conditions and postponed orders.
Of the four areas of the service economy the survey tracks, only Finance and Insurance recorded faster growth in both output and sales. Pranjul Bhandari, chief India economist at HSBC, said new business growth eased in domestic and export markets alike "after several months of strong performance."
The employment line, read properly
Job creation improved in July, from a six-month low in June.
The composition is the part worth holding on to. Only 6 percent of firms reported higher payroll numbers, and 92 percent reported no change at all, so a faster rate of hiring here describes a small minority moving inside a panel that is largely static. Backlogs of work fell, after marginal increases in May and June, and the pace of that decline was the quickest in close to five years. That is capacity opening up rather than filling.
Exports held up
New export orders rose at a solid rate, and faster than total sales.
Survey participants named clients in the United Arab Emirates, the United Kingdom and the United States as the sources of that demand. It is the clearest divergence in the release: the domestic order book decelerated sharply and the foreign one did not.
Costs down, prices up
Input cost inflation across services eased to a six-month low and ran below its long-run average, with panellists still reporting higher fuel, labour, material, technology and transport costs.
Charges went the other way. Output prices rose at the quickest pace since April. Consumer Services reported the steepest cost increases and the smallest charge increases, while Real Estate and Business Services sat at the top of the charge rankings.
Confidence about the year ahead slipped to a seven-month low.
The composite output index, which weights manufacturing and services by their shares of GDP, fell to 54.3 from 57.1. That is the weakest reading since March 2022, and the release attributes the move to services, noting that factory production growth ticked marginally higher.
