New Delhi: India's services sector expanded at the fastest pace in five months in August. The seasonally adjusted HSBC India Services PMI business activity index rose to 60.9 in August from 60.3 in July, supported largely by productivity gains and positive demand trends. In Purchasing Managers' Index (PMI) parlance, a reading above 50 signifies expansion in activity and a reading below 50 signifies contraction.

Talking about prices, the cost of raw materials increased the least in six months. The same trend was seen in both manufacturing and service sectors. This led to a decline in 'output' price inflation in August. The survey said, 'The overall rate of tariff inflation in India's service economy remained moderate. This increase was also slower than the increase seen in July.' At the same time, the employment level remained strong, although the pace of hiring was slightly slower than in July.

Meanwhile, the HSBC India Composite PMI Output Index stood at 60.7 in August, same as in July. The August data also showed that prices for Indian goods and services rose less than in July. Both manufacturing companies and their services counterparts saw cost pressures ease in August. The survey said the overall rate of inflation fell to a six-month low.