Service activity slows in Sept, Purchasing Managers’ Index at 50.9
NEW DELHI: Weak demand and stagnant new work made India’s services sector expand at a slower pace in September compared with August, a private survey showed on Thursday.
The Nikkei/IHS Markit Services Purchasing Managers’ Index declined to 50.9 in September from 51.5 in August.
The new reading was the lowest in the last four months of improving activity but remained above the 50-mark that separates growth from contraction.
“Growth of India’s services economy spluttered during September amid reports of faltering demand for services,” said Paul Smith, Economics Director at IHS Markit and author of the report.
Despite a slight improvement in the manufacturing sector, where output growth strengthened to a solid pace,
the composite PMI fell to a four month low of 51.6 in September against 51.9 in August.
Rising price pressures were cited as a factor weighing on market activity, with reports from panellists of rising fuel and import prices driven by the stronger US dollar.
Companies reported that market conditions were underwhelming amid a lack of demand at a time of generally higher prices, according to the survey.
Underlying growth in activity and new work remained strongest in information & communication. In contrast, there were falls seen in the finance & insurance and business services categories.
As for employment, Smith said though companies were not completely discouraged to hire additional workers, the rate of job growth was slower across the private sector as a whole, pointing to a little more caution among firms heading into the final quarter of the year.
Confidence amongst service providers about the year ahead remained inside positive territory. Around 22% of the survey panel signalled expectations for activity growth, with market demand forecast to strengthen. Marketing and the offering of high quality services are also expected to bolster activity.
The Nikkei/IHS Markit Services Purchasing Managers’ Index declined to 50.9 in September from 51.5 in August.
The new reading was the lowest in the last four months of improving activity but remained above the 50-mark that separates growth from contraction.
“Growth of India’s services economy spluttered during September amid reports of faltering demand for services,” said Paul Smith, Economics Director at IHS Markit and author of the report.
Despite a slight improvement in the manufacturing sector, where output growth strengthened to a solid pace,
the composite PMI fell to a four month low of 51.6 in September against 51.9 in August.
Rising price pressures were cited as a factor weighing on market activity, with reports from panellists of rising fuel and import prices driven by the stronger US dollar.
Companies reported that market conditions were underwhelming amid a lack of demand at a time of generally higher prices, according to the survey.
Underlying growth in activity and new work remained strongest in information & communication. In contrast, there were falls seen in the finance & insurance and business services categories.
As for employment, Smith said though companies were not completely discouraged to hire additional workers, the rate of job growth was slower across the private sector as a whole, pointing to a little more caution among firms heading into the final quarter of the year.
Confidence amongst service providers about the year ahead remained inside positive territory. Around 22% of the survey panel signalled expectations for activity growth, with market demand forecast to strengthen. Marketing and the offering of high quality services are also expected to bolster activity.