India Services Growth At 6-Month Low

india-services-growth-at-6-month-low

India’s service sector activity expanded at the weakest pace in six months in September, as output and new orders rose at a slower rate amid inflationary pressures and competitive conditions, survey results from S&P Global showed on Thursday.

The services Purchasing Managers’ Index dropped to 54.3 in September from 57.2 in August. However, a score above 50 indicates expansion in the sector.

New orders grew for the fourteenth successive month in September, but at the slowest pace in six months.

On the price front, input prices rose further in September and the rate of inflation was almost unchanged from August, driven by higher energy, food, labour and material costs. Meanwhile, selling price inflation eased to a six-month low.

Capacity pressures moderated in September, as backlogs of work increased at the slowest pace in seven months.

Nonetheless, efforts to clear pending workloads and ongoing sales expansions aided further rise in employment.

Looking ahead, service firms were the most optimistic about the future in over seven and a half years, as marketing efforts and forecasts of sales growth boosted business confidence in September.

The composite output index declined to 55.1 in September from 58.2 in August. Manufacturers recorded a stronger upturn than service provides, though growth softened in both cases.

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