Services sector growth hits 4 ½ year low in July on weak demand: PMI

India's services sector growth fell to a four-and-a-half-year low in July as new business orders eased in both domestic and export markets, constrained by fierce competition and fading demand, a monthly survey stated on Wednesday.

Business activity rose at the weakest rate in 53 months, as new business inflows increased moderately amid reports of softer demand and competitive pressures. 

The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 57.4 in June to 53.3 in July, registering the weakest growth rate in close to four-and-a-half years. 

The seasonally adjusted HSBC India Services PMI Business Activity Index—based on a single question asking how the level of business activity compares with the situation the month before—remained above the neutral mark of 50 and therefore signalled another expansion in output. 

"India's services sector continued to expand in July, albeit at a slightly slower pace, as new business growth eased in both domestic and export markets after several months of strong performance," stated Pranjul Bhandari, Chief India Economist at HSBC. 

New business inflows expanded at a moderate pace, the slowest since February 2022. 

According to panel members, growth was constrained by fierce competition, fading demand, softer market conditions, and order postponements.   -PTI