Services sector growth at 11-month high in July, but hiring hits 15-month low
According to the services purchasing managers index (PMI), compiled by S&P Global for HSBC India, the services activity rose to an 11-month high of 60.5, driven by robust export orders. This comes on heels of flash manufacturing PMI rising to 60.7 in July, a 16-month peak.
Survey respondents cited strong advertising campaigns, new client onboarding, and solid demand as the primary drivers of growth. Export orders improved, with firms securing contracts from Asian, American, Canadian, European, the UAE importers. Sectorally, finance and insurance led growth, while real estate and business services lagged.
However, all in not well with hiring slowing despite surging demand. Despite healthy order books, employment growth eased to its weakest pace in 15 months, with fewer than 2% of the surveyed companies adding staff in July.
'At 60.5, the services PMI indicates a strong growth momentum, led by a pick-up in exports. Optimism has risen but remains below the first half levels,' said HSBC India chief economist Pranjul Bhandari said in a note.
Also, another negative is the rising price pressure with the report noting that input costs and output charges are rising at a faster pace than in June, reflecting higher food, freight, and labour expenses, she says.
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