India's services sector growth improved in August –– registering the fastest pace in six months –– as the segment continued to show “resilience” amid sagging economic scenario, an HSBC survey said.
The HSBC’s Services Purchasing Managers Index (PMI) for August inched upwards to 55, from 54.2 in July. The index has kept above the 50-mark below which it indicates contraction, since November 2011.
August witnessed the fastest pace of growth in new business orders since February and there was also marked increase in optimism about the future, HSBC said.
Private sector companies in India witnessed a further rise in new orders during August. It was the sixth successive month of job creation in the sector.
Earlier an HSBC survey had shown that India’s manufacturing sector witnessed the weakest growth rate in nine months in August because of shrinking export orders and disruptions caused by power failures.
Accordingly, the HSBC India Composite Output Index, which maps both services and manufacturing activity, fell slightly to 54.3 in August from 54.4 in July.
On the inflation front, HSBC said even though the readings improved to some extent, higher wage costs and solid demand are keeping inflation pressures “firm”.
In its last quarterly monetary policy review, the Reserve Bank left key interest rates unchanged amid fears of deficient monsoon and high inflation.
RBI also lowered the economic growth projection for the current financial year to 6.5 per cent from its earlier estimate of 7.3 per cent.