India's services growth hits six-month high on domestic demand, PMI shows

BENGALURU, June 3 (Reuters) - India's dominant services sector grew at its fastest pace in six months in May on a pick-up in domestic demand, even though global orders stayed below last year's average and business confidence slipped for a second straight month, a survey showed.

* HSBC's India Services Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 59.8 in May from April's 58.8, higher than a preliminary estimate of 58.9. A reading above 50.0 indicates growth. India's services PMI has stayed above that threshold since mid-2021.

* New business - a key gauge of demand - rose to its highest since November 2025 due to e-commerce, entertainment and IT.

* Export orders grew, though only slightly after touching a 5-month low in April with a U.S. trade deal still pending, creating uncertainty.

* Hiring continued, though the pace eased slightly, with fewer than 7% of firms surveyed noting new recruitment, suggesting the headline expansion is not yet translating into broad-based job creation across the services sector.

* On prices, input cost inflation retreated for a second month from a 45-month high struck in March. That gave firms some breathing room with the prices charged sub-index easing to a four-month low.

* Despite headline strength, the business outlook index slipped to 61.9 from 62.3 - its second consecutive monthly dip - and was below its historical average, suggesting firms are growing more cautious.

* The broader private sector economy also picked up steam with the Composite PMI, which combines services and manufacturing, rising to 59.3 in May from 58.2, its highest in six months. (Reporting by Anant Chandak; Editing by Jacqueline Wong)