India's services sector growth hits a fifteen-year high in August

India's services sector growth reached a fifteen-year high in the month of August, on the back of surging new orders. The broad-based expansion in international sales bolstered overall demand, which prompted Indian services firms to hire additional workers.

According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index grew to 62.9 in August from 60.5 in July. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also surged to 63.2 in August as against 61.1 in July, indicating the sharpest pace of expansion in over 17 years.

The report said that sustained job creation helped service providers to somewhat stay on top of their workloads. Outstanding business volumes still expanded in August, but did so only marginally and at the weakest pace in close to a year.

As per the report, year-ahead expectations improved to a joint five-month high in August (equal to May), buoyed by budget allocation for advertising and forecasts that demand trends will remain favourable. Some companies also hope to be able to take on more work as a result of staff recruitment in recent months.

The manufacturing activity expanded at the fastest pace in nearly 17-and-a-half years in August, driven by robust domestic demand and a sharp rise in output, a monthly survey said on Monday.

The HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 59.3 in August from 59.1 in July, marking its highest since early 2008.

The strong growth in the activity of services and manufacturing sectors comes in line with the broader trend of growth as India’s GDP for the Q1FY26 grew by 7.8%, the fastest in five quarters.