India’s services sector expanded at its fastest pace in seven months as a spurt in new business encouraged firms to hire more staff, a survey showed , suggesting the worst of the economic slump may be over.
The HSBC purchasing manager’s index for the services sector, which gauges the activity of hundreds of Indian companies, rose to 55.8 in September from August’s 55.0. A reading of 50 and above separates growth from contraction and the index has held above the break-even mark since November last year.
India’s services sector makes up for over 60 per cent of the country’s gross domestic product and a strong reading in HSBC’s survey augurs well for the economy, where growth has faltered in recent months against the backdrop of political upheaval.
The new business sub-index surged to its highest since February allowing firms to hire more workers, and employment touched a 15-month high.
But survey participants are now less optimistic about the future.
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