Operating conditions across India's service economy remained favorable in September, with healthy demand trends underpinning further growth of total new orders, exports, employment and business activity. In all four cases, however, rates of expansion eased since August.
Encouragingly, a softer increase in expenses helped curtail charge inflation. Moreover, confidence towards the year ahead outlook for output strengthened.
At 60.9 in September, the seasonally adjusted HSBC India Services PMI Business Activity Index was well above the neutral mark of 50.0 to signal another substantial upturn in output. Falling from 62.9 in August, however, the latest figure showed a loss of growth momentum.
External sales still rose in September, but did so to the least extent since March. Companies identified the supply of services at lower prices elsewhere as the main factor behind the slowdown in growth of export orders.
Indian services companies reported a further increase in their expenses at the end of the second fiscal quarter. Companies' assessments of growth prospects improved in September, with the overall level of positive sentiment reaching a six-month high.
India's private sector continued to experience robust growth, but there were softer increases in new orders, international sales, business activity and employment during September.
The HSBC India Composite PMI Output Index slipped from 63.2 in August to 61.0, indicating the weakest rate of expansion since June. The figure nevertheless remained comfortably above its long-run average and the neutral mark of 50.0.
In addition to a broad-based slowdown in growth of output across the manufacturing and service sectors, there were softer increases in new orders across the two segments.
At the composite level, total sales rose at the softest pace in three months. Inflation trends were mixed, with faster increases in expenses and selling prices at manufacturers contrasting with slower rises in the service economy.
Across the private sector, costs and charges rose at the slowest rates in two and three months respectively.