Services, the biggest sector of India's economy, contracted for the seventh month in a row in January, showed widely-tracked HSBC purchasing managers' index (PMI).
However, PMI for services showed an uptick, moving up to 48.3 points in January from 46.7 in the previous month, a statement by Markit Economics, which compiles the data, said today. The reading below 50 shows decline in activities, including output, and higher score shows expansion.
If PMI data reflects in official data, hopes of policy makers to see recovery in economic growth from the fourth quarter may be dashed.
The conraction in PMI was, however, the weakest in seven months.
With manufacturing showing an increase in growth as PMI rose 51.4 points in January from 50.7 in the previous month, the composite PMI stood at 49.6 points compared to 48.1. Together with services, it is the seventh consecutive fall in composite PMI.
Respondents to PMI survey cited tough economic conditions, political issues and lower new order levels as the main reasons behind the fall in output, said Markit Economics.
Leif Eskesen, Chief Economist for India & ASEAN at HSBC said," Service sector activity remains weak and broad based, although Post & Telecommunication led the softening in January."
Service providers reported fall in new business for the seventh month running in January, with respondents commenting on increased competition for new work, deteriorating confidence among clients and weaker underlying demand.
Despite having lower new business, service providers hired additional workers in January. Where job creation was indicated, this was attributed to expectations of higher new orders in coming months.
With manufacturing employment also growing, staffing levels across the private sector increased for the second successive month, although slightly.
Service providers were optimistic in January that business activity would expand over the next year.
Growth is expected to be supported by the planned increase in marketing, forecasts of an overall improvement in the Indian economy and stronger demand. Moreover, the degree of positive sentiment was the highest in six months.
Meanwhile, input cost inflation in the Indian private sector economy hit a three-month high.
via Business - Google News http://ift.tt/1inwpbP
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