The HSBC India Composite Output Index, which maps both services and manufacturing, increased from 48.9 in March to 49.5 in April, but remained below the crucial 50 mark which indicates contraction for the second successive month.
"April data indicated that business activity across the Indian private sector fell again. The seasonally adjusted HSBC India Composite Output Index rose from 48.9 in March to 49.5. Despite being consistent with a marginal rate of reduction, the is was the second consecutive sub 50 reading recorded," an HSBC PMI release states.
Manufacturing production increased at a softer rate in April, whereas service sector out put decreased further.
Commenting on the India Services survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said, "While the Business Activity Index improved, it remained below the water line. This points to still subdued service sector activity. Meanwhile, the slight uptick in inflation readings suggests
that inflation pressures are still lingering, which calls for the RBI to continue its starring contest with inflation."
Indian services companies indicated that payroll numbers fell in April, amid evidence of lower new business inflows. Despite being fractional, the latest drop in staffing levels ended a four-month sequence of job creation.
Workforce numbers in the private sector as a whole were broadly unchanged.
Business sentiment in the service sector remained positive in April, with survey respondents indicating that combination of planned increases in marketing budgets, the launch of new services and forecasts of stronger demand are all expected to result in output growth over the course of the next year. There were also mentions that economic conditions are anticipated to improve after the elections