India’s services sector growth eased in October, though it remained strong overall, supported by resilient demand and Goods and Services Tax (GST) relief, a private survey showed on Thursday.
As per the S&P Global, the HSBC India Services Purchasing Managers’ Index (PMI) fell to 58.9 from 60.9 in September, indicating the slowest pace of expansion since May but staying well above the 50-mark that separates growth from contraction.
It said that the firms surveyed mentioned higher client footfall and GST relief continued to support activity, but competition and heavy rains limited growth momentum. Despite the moderation, the headline index remained comfortably above its long-run average of 54.3.
The combined output of India’s manufacturing and services sectors expanded sharply in October, though momentum softened.
The HSBC India Composite PMI Output Index dropped to 60.4 from 61.0 in September, its lowest since May. While manufacturers saw faster growth, the slowdown in services activity pulled the overall index lower.
New business intakes rose sharply but at the weakest pace in five months, as floods and heightened competition weighed on demand.
Further, the international sales continued to grow, albeit at the slowest rate since March, signalling solid but moderating overseas demand for Indian services.
The S&P Global survey also showed that input costs rose at the slowest pace in 14 months, with firms citing higher spending on fruits, vegetables, maintenance, and construction materials.
The GST reform was reported to have helped curb price pressures, while the output charges also increased at the slowest rate in seven months, with fewer than 5 per cent of respondents indicating higher prices.
Firms also added staff in October amid efforts to meet delivery deadlines and maintain service reliability. The rate of job creation, however, was modest and among the weakest in 18 months. The increase in hiring helped reduce outstanding workloads for the first time in nearly four years.