India’s services sector activity remained robust in August, defying concerns about a potential slowdown in the broader economy. The sector’s performance was underpinned by a surge in new orders, particularly from domestic clients, and a positive outlook among businesses.

The seasonally adjusted HSBC India Services Business Activity Index climbed to 60.9 in August from 60.3 in July, marking the highest level since March.

In the Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

“The Composite PMI for India continued to be strong in August, driven by accelerated business activity in the service sector,” said Pranjul Bhandari, chief India economist at HSBC.

Despite rising global economic uncertainties, Indian businesses remained optimistic about their prospects, with the Future Output Index remaining above its long-term average. This confidence supported job creation in the services sector, which saw sustained employment growth.

Input costs for service providers rose at the slowest pace in six months, while output price inflation eased. This suggested that businesses were able to pass on a smaller portion of their rising costs to customers.

However, the outlook for the Indian private sector over the next year has moderated, reaching its lowest level in 15 months because of competitive pressure, although the Future Output Index remained above the long-term average.

According to the survey, employment levels remained robust, though there was a slight decrease in the pace of hiring compared with July.

“Confidence in the year-ahead outlook for business activity, coupled with rising backlogs and sustained growth of new business continued to support job creation,” the survey noted.

The HSBC India Composite Output Index, which combines manufacturing and services data, remained unchanged at 60.7 in August.