India’s services sector activity expanded at a faster pace in June compared with May’s five-month low, driven by a surge in new orders and a record rise in international sales, a monthly survey showed on Wednesday.

The seasonally adjusted HSBC India Services Business Activity Index rose to 60.5 in June from 60.2 in May, indicating a sharp increase in output.

A reading above 50 suggests expansion, while below 50 signals contraction.

“The uptick in services sector activity was led by a pick-up in new orders, both domestically and from abroad,” said Pranjul Bhandari, chief India economist at HSBC.

“This led service providers to ramp up hiring at the fastest pace since August 2022.”

Strong client demand and a rise in new business inflows were the key drivers of growth.

New orders continued to expand in June, marking a near three-year growth trend for Indian service providers. Notably, there was a record increase in international orders, with new work coming from regions such as Asia, Australia, Europe, Latin America, West Asia and the US.

Positive client sentiment prompted service firms to add to their workforce at the end of the first quarter. Staffing levels increased at the fastest pace since August 2022.