"Business activity across the Indian private sector rose for the fiftieth consecutive month in June. However, with services companies registering weaker output growth and manufacturers posting a second consecutive monthly decline, the HSBC India Composite Output Index fell from 52.0 in May to 50.9. This was consistent with a marginal rate of expansion, one that was the second-weakest in over a year-and-a-half," a release from HSBC PMI states.
The seasonally adjusted HSBC Services Business Activity Index fell from May's three-month high (53.6) to 51.7, indicating a modest rise in activity levels across India during June. Anecdotal evidence suggested that weaker gains in new work and subdued economic conditions were behind the deceleration in output growth. Sector data indicated that business activity expanded in three of the six monitored categories. The strongest rise was recorded at ‘Other Services'.
Commenting on the India Services PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said:
"Service sector activity grew at a slower clip as new business flows moderated, which made businesses less optimistic about the year ahead. Notwithstanding the slowdown, inflation readings firmed on the back of higher labour and raw material prices, with the depreciation of the Rupee also cited as a factor."
Service providers again expressed optimism towards output growth in the one-year outlook. However, the degree of positive sentiment fell to the lowest in eight months.