The HSBC India Composite Output Index posted 54.4 in July, indicating the slowest expansion of output in three months. After adjusting for seasonal factors, the headline HSBC Services Business Activity Index - which is based on a single question asking respondents to report on the actual change in business activity at their companies compared to one month ago - posted 54.2 in July, down from 54.3 in June. Production at manufacturing firms meanwhile increased at a marked pace, but the slowest since November 2011.
New orders at private sector companies in India rose steeply in July. However, the pace of increase slowed from that recorded in June and the New Orders Index was the lowest since November 2011. The volume of incoming new work expanded in both sectors surveyed, with services firms signalling a faster increase.
Job creation was recorded at manufacturers and service providers during July. The pace of increase was broadly similar across both sectors, resulting in a slight rise in workforces at Indian private sector firms. Services companies stated that workforces were increased in order to meet stronger demand.
With employment increasing at Indian private sector firms, backlogs of work fell slightly. Although services firms accumulated backlogs, manufacturers recorded a modest depletion. That said, the pace of contraction in backlogs was the same as that recorded in June.