India Services PMI Hits 11-Month High in July, But Hiring Slows Down

New Delhi: India’s services sector continued its growth streak in July, with the HSBC India Services PMI climbing marginally from 60.4 in June to 60.5, its highest level since August 2024. The improvement was attributed to:

Aggressive advertising campaigns

New client acquisitions

Robust foreign orders from regions like Asia, Canada, Europe, the UAE, and the US

Leading contributors to growth included finance and insurance, while sectors like real estate and business services lagged behind.

Employment Weakens Despite Booming Orders

Ironically, job creation didn’t keep pace with the rising demand. According to the S&P Global report:

Hiring rose at the slowest pace in 15 months

Less than 2% of surveyed companies added new staff

Business optimism grew slightly, but still remained below first-half 2025 levels

Price Pressures Intensify

Input and output prices grew at a faster rate than in June.

Businesses cited rising food prices, freight costs, and labour charges as contributing factors.

Manufacturing Activity Climbs to 16-Month High

While the spotlight remained on services, the HSBC Manufacturing PMI also showed strength, jumping to 59.1 in July from 58.4 in June. The manufacturing rebound was driven by:

Higher new orders

Strong output levels

However, business sentiment and hiring remained soft

Composite PMI Shows Broad-Based Momentum

The Composite PMI Output Index which combines both manufacturing and services increased to 61.1 in July from 61.0 in June, the fastest pace since April 2024. However:

The Future Output Index fell to its lowest point since March 2023, suggesting that while the current situation is positive, companies are cautiously optimistic about future growth.