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India services growth slows to weakest pace since February 2022 as domestic demand softens

India services growth slows to weakest pace since February 2022 as domestic demand softens

HSBC's July PMI survey showed slower expansion across services, manufacturing and the broader economy, even as export orders improved and firms raised selling prices.

Fact Check
All three components of the composite claim are directly supported by the caller-supplied Trading Economics source pages. The Indonesia source confirms a return to expansion (PMI 50.2 vs 46.9). The Japan source confirms the PMI was revised slightly lower (54.5 from preliminary 54.7) while remaining in strong expansion. The Philippines source confirms faster July expansion (51.8 from 50.9) driven by demand and new projects. Independent web searches corroborate the June baselines and Japan's preliminary-to-final revision path.
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Summary

India's services sector lost momentum in July, with the HSBC India Services PMI compiled by S&P Global falling to 53.3 from 57.4 in June, its weakest reading since February 2022. The slowdown extended across the economy: the HSBC Flash India Composite PMI Output Index eased to 54.3 from 57.1, the lowest since March 2022, while the Manufacturing PMI slipped to 53.5 from 54.2, its weakest level since August 2021. Softer domestic demand was the main drag on services activity. New business inflows grew at their slowest pace since February 2022 as companies reported stronger competition and fewer new enquiries from domestic clients. By contrast, new export orders accelerated, supported by demand from the UAE, the UK and the US. The survey also showed modest employment growth in services, easing input cost inflation and rising output price inflation, indicating that businesses were still passing through costs. Business confidence fell to a seven-month low. With the July data collected mainly between July 8 and July 27, investors are now watching whether services activity stabilizes in the low 50s, which would still signal expansion, or weakens further toward contraction below 50.

Terms & Concepts
  • Services PMI: A purchasing managers' index that tracks business activity in the services sector, with readings above 50 indicating expansion and below 50 indicating contraction.
  • Composite PMI Output Index: A survey-based measure combining services and manufacturing activity to show the overall pace of private-sector output growth.
  • Output price inflation: The rate at which companies increase the prices they charge customers for goods or services.