Bengaluru, Sept 3 (Reuters) – India’s dominant services sector accelerated slightly in August but persistently subdued new business kept overall activity near its weakest in more than four years, a survey ‌showed, though firms ramped up hiring at the fastest pace in over a year.

HSBC’s India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 54.1 in August from July’s 53.3, but was slightly lower than a preliminary estimate of 54.5.

A ⁠PMI above 50.0 signals expansion in activity. However, the headline reading was fractionally below its long-run average. New business – the survey’s primary demand indicator – grew at the second-slowest pace in over four years.

International demand offered limited support as new export orders expanded at a broadly similar rate to July.

On the labour front, services firms hired at the fastest rate in 15 months suggesting some ‌confidence ⁠remains.
However, business confidence was below its long-run average for a second month although firms were cautiously hopeful market conditions and demand would improve.

A Reuters poll showed Asia’s third-largest economy growing 6.7% this fiscal year, weighed down ⁠by elevated oil prices and a weak rupee, pointing to a slowdown from solid 7.8% growth last quarter that beat expectations.

Cost pressures ticked up modestly. Prices charged to ⁠clients rose at the fastest pace since March with firms passing on higher operating expenses.

India’s Composite PMI, which combines services ⁠and manufacturing, held flat at 54.3. A quicker services expansion was needed to hold the composite steady as manufacturing growth slipped to a five-year low.