Services Sector Output In India Contracts To Lowest Level Since March 2014

Business

oi-Sunil

By Sunil Fernandes

Published: Friday, July 3, 2015, 11:05 [IST]

India's services sector output contracted to the lowest level since March 2014 and the seasonally adjusted Nikkei Services Business Activity Index posted 47.7 in June. This was down from 49.6 in May to its lowest level since March 2014, the latest reading was indicative of a moderate rate of decline.

Business activity fell in five of the six monitored categories, the exception being Hotels & Restaurants, according to a release from Nikkei/Markit.

Underlying the drop in services activity was a further contraction in new business. June's reduction in new work was the quickest since December 2013, with panellists commenting on competitive pressures and extreme heat.

"Order book volumes received by manufacturers, increased further, although at a modest and softer pace. Incoming new work across the private sector as a whole fell, ending a 13-month sequence of growth," a release from Markit on the Nikkei Business Activity Index stated.

Commenting on the Indian Services PMI survey data, Pollyanna De Lima, economist at Markit, which compiles the survey, said: "June's Indian service sector data disappointed, with reductions in both activity and new business accelerating since May. The heatwave and
competitive pressures were again reported to have weighed on service providers' performance.

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