India’s services sector grew at its fastest pace in three months in September. The HSBC India Services PMI rose to 55.2 from 54.1 in August. A reading above 50 signals growth.

The final figure was below the flash estimate of 55.8. Strong demand for financial, consumer and digital services drove the rise. New business grew at its fastest pace since June.

But export orders grew at their weakest pace in nearly three years. Domestic customers provided the main support for the September pickup.

Despite the monthly improvement, the July-September quarter was the weakest since March 2022. Hiring growth eased from August. Input cost inflation fell to a 10-month low. Only 16% of firms expected output to rise over the next year.

Business confidence hit a three-month high. But it stayed subdued by historical standards. The composite PMI, covering services and manufacturing, rose to 55.9 from 54.3. Manufacturing growth was the fastest since February.

Pranjul Bhandari, chief India economist at HSBC, said domestic demand supported the improvement. Export growth slowed at the same time.