India’s services PMI fell to 58.9 in October, its slowest expansion in five months. Here is what the number means, why it slipped, and what it signals for the economy.

The Purchasing Managers’ Index surveys around 400 services companies. A reading above 50 means expansion. At 58.9, down from 60.9 in September, services are still growing solidly, marking the 51st straight month above 50, but momentum has cooled.

Two factors drove the slowdown: heavier competition and heavy rains, including floods and landslides that disrupted activity. Export orders grew at their weakest pace in seven months, and hiring ran at its joint-softest pace in 18 months.

The silver lining is prices. Input costs rose at the slowest rate since August 2024, helped by GST relief, and customer prices increased at the weakest pace in seven months. Manufacturing, meanwhile, rebounded to 59.2, outpacing services for the first time in nine months, so the slowdown looks sector-specific rather than economy-wide.