India’s Final Services Index Rises to 55.8, Posting Fastest Growth in Four Months
Key Facts
India’s services activity growth accelerated in October, with the final business activity index rising to 55.8 points from 55.2 in September, posting its strongest growth in four months, according to survey data reported by Investing.com. The final reading was below the preliminary estimate of 56.2 points, while remaining above September’s reading. The results showed domestic demand was the main driver of sales as growth in new export business slowed. Survey data were collected between 9 and 28 October, according to the same source. The reading points to continued expansion in services, with a clear divergence between strong domestic demand and weaker external demand growth.
Total new business grew at its fastest pace since June, driven mainly by domestic orders, according to the survey results. Companies reported winning new clients and successful advertising campaigns, pointing to sources of demand that supported activity during the month. By contrast, growth in new export business was at its weakest pace since February 2023. This divergence made the domestic market the most prominent driver of sales growth in October, while external demand for services contributed less momentum. The survey did not report a monetary value for new orders or services exports.
Activity was uneven across the services sectors covered by the survey. Finance and insurance led growth in new business and output, according to the results. Real estate and business services recorded the slowest growth among the four services sectors tracked by the survey. Services firms reduced their backlogs of unfinished work for the third time in four months, a development noted in the report’s activity details. These results add to the picture of differing momentum across services subsectors, without changing the overall outcome shown by the final index.
The improvement in activity was not matched by a similar acceleration in hiring: employment growth slowed to its weakest pace since June, with job creation falling to a marginal level, according to Investing.com. The final reading described employment as nearing stagnation, which does not mean it was unchanged during October. The employment data end the run of improvement seen in the preliminary survey, but do not provide a count of jobs created. They highlight the expansion in business activity alongside a limited increase in employment during the month. The report did not give a company explanation for the slowdown in hiring.
On costs, input costs rose at their slowest rate of inflation in more than six years, according to the survey results. Still, some participants said electricity, labor, raw materials and transport remained sources of cost increases. Easing input cost pressures fed through to prices charged for services, which rose at their weakest pace since June. Less than 3% of service providers raised selling prices during October. These indicators point to slower increases in costs and prices, while specific operating expenses continued to weigh on companies.
In the broader index, the HSBC Composite Output Index, which combines services and manufacturing, rose to 56.2 points in October from 55.9 in September, posting the fastest increase in overall output in four months, according to Investing.com. The preliminary survey reading in September had indicated an average composite index of 55.1 points in the quarter from July to September, compared with an average of 58.2 points in the quarter from April to June. This followed gross domestic product growth of 7.8% in the previous quarter, according to a Reuters report via Investing.com. These figures put October’s acceleration in the context of a slowdown in the index’s average between the two previous quarters, which cover different periods. The business confidence index also improved from the previous month, and companies’ outlook for activity remained positive amid expectations of improving market conditions.
India’s Ministry of Statistics is scheduled to release the industrial production index on 28 November 2026, according to its published calendar. The release follows the October services survey data, but measures industrial output and is not a new reading of the Purchasing Managers’ Index. The industrial index will add data on another area of India’s economic activity when it is released. The calendar listed the date as 28 November. The final services survey remains the available measure of sector activity during October.