HSBC India services PMI is revised to 55.2, under the 56.2 forecast

The final HSBC India services PMI for September came in at 55.2, revised down from a flash reading of 55.8 and short of the 56.2 consensus. The index still rose from a final 54.1 in August, and it is still the strongest services reading since June. A figure above 50 marks expansion. The revision is the news. The flash print had overstated the month by 0.6 points, and the street had been positioned for a number above both.

New orders rose at the fastest pace in three months. Respondents pointed to marketing and to demand in financial and insurance services. An earlier flash comment had talked up property, transport and travel bookings, and interest in software. The final cut narrowed that list. Foreign demand improved, but the pace was the softest in nearly three years. That split is the useful one. Domestic orders carried the month. Export orders in services did not.

Firms hired, and they hired more slowly than in August. Input prices rose, led by food supplies, fuel and insurance premiums. Prices charged to clients rose at the slowest rate in three months. Margins, on that pair of lines, were squeezed from the cost side and not repaired on the invoice. A services sector that is busier than in August and charging less extra than it did three months ago is not the same picture as a sector with pricing power.

The factory survey, published earlier, moved further. The HSBC India manufacturing PMI rose from 52.8 in August to 55.1 in September, a seven-month high. Pranjul Bhandari, chief India economist at HSBC, said stronger domestic and overseas demand lifted sales and production, that hiring returned at the fastest pace since May, and that finished-goods stocks posted their second-largest rise in nearly 12 years. The manufacturing average for the second fiscal quarter was 53.8, the lowest for that quarter since 2021. A strong September did not repair a weak quarter. Data for the factory survey were collected from 7 to 24 September.

Set beside the World Bank's Tuesday upgrade of FY27 growth to 7.1 percent, the PMI pair is the higher-frequency check. Services at 55.2 and manufacturing at 55.1 say both large sectors were expanding in September. They do not say the expansion matched the flash or the forecast. A 0.6-point downward revision in services, and a foreign-order line at a near-three-year low, are the details a growth upgrade of half a percentage point does not capture. The bank's own text flagged a rainfall deficit through August as a drag on rural demand. Services firms in this survey did not cite the monsoon. They cited food, fuel and insurance as costs.

The employment line is the one that will be misread if it is quoted only as "firms hired". The pace slowed from August. In manufacturing, hiring was the fastest since May. The two surveys are describing different labour markets in the same month. A factory adding shifts and a services firm adding fewer people than last month can both be true, and the combined PMI will hide that if it is reported as a single India number.

S&P Global runs the survey for HSBC. The final services figure replaces the flash. Anyone still using 55.8 is using a withdrawn print. The number that stands is 55.2, against 54.1 in August, against a 56.2 forecast, with domestic orders at a three-month high and foreign services demand at the softest pace in nearly three years.