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India's services PMI drops for fifth month in a row
"This was the fifth sub-50.0 reading in as many months and indicated a solid rate of output contraction across the Indian service economy. Five of the six broad sectors covered by the survey recorded lower business activity, the exception being Post & Telecommunication. For the third successive month, the sharpest drop was noted at Hotels & Restaurants," a release from Markit states.
Triggering the latest fall in service sector output was a fifth consecutive monthly drop in new work. The overall rate of contraction was moderate and little-changed from that seen in October. Evidence from survey participants highlighted weaker demand, competitive pressures and tough economic conditions. Across the private sector as a whole, order books fell for the fifth successive month, but at the weakest pace in this sequence.
Commenting on the India Services PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said:
"Service sector activity remains subdued, but would at least appear to be stabilizing. The inflation picture is a bit mixed, with prices charged rising at a faster pace while input price inflation eased somewhat. Looking ahead, economic activity is expected to remain soft in coming months as high inflation, tighter financial conditions, and structural constraints continue to weigh on growth."
November data indicated that outstanding business in the Indian private sector rose for the first time in four months. The rate of backlog accumulation was modest, albeit the strongest since February. Service providers indicated that delayed payment from clients and cashflow problems resulted in higher unfinished work, while manufacturers commented on new business growth and power outages.
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