"The HSBC India Composite Output Index fell from 54.8 in February to 51.4 indicating that activity increased slightly, and at the slowest pace in 17 months. Output growth eased across both the manufacturing and service sectors," a HSBC PMI press release states.
Commenting on the India Services PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said, "Growth in service sector activity slowed notably due to a deceleration in new business flows. Moreover, backlogs of work and hiring rose at a slower pace. Even so, businesses remained confident about the future. Encouragingly, input prices and prices charged inflated less fast. Despite this the scope for further rate cuts is limited, and the next cut may well be the last."
New work intakes in the Indian service sector rose for the seventeenth successive month during March. Despite being solid, the pace of expansion eased to the slowest in the current sequence of growth. Manufacturing firms also signalled a weaker increase in new orders.
March data pointed to a further rise in outstanding business levels across the Indian private sector. Manufacturing companies indicated that unfinished business volumes were accumulated in tandem with persistent powercuts. Services companies mentioned that greater inflows of new business resulted in higher backlogs of work. In response to higher workloads, service sector firms added to their staff numbers during March, marking a 13-month sequence of employment growth. Manufacturers also signalled increased payroll numbers but, as was the case with services, the rate of job creation was moderate.
Continuing the trend that has been observed throughout the past four years, input prices in the Indian service sector rose during March. The rate of cost inflation was solid, but the slowest in the year to date. Subsequently, services companies increased their selling prices. The rate of output charge inflation was, however, moderate and weaker than February.