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Services sector slows in November: HSBC PMI


Services sector slows in November: HSBC PMI
The HSBC India Composite Output Index posted 53.2 in November, slightly down from 53.5 in October, signalling a further improvement in activity at Indian private sector firms. Although solid, the rate of expansion was the slowest in 12 months.

Manufacturing and services companies both recorded increases, although power shortages hampered manufacturing production.


The headline HSBC Services Business Activity Index is based on a single question asking respondents to report on the actual change in business activity at their companies compared to one month ago.

After adjusting for seasonal variations, the index posted 52.1 in November, down from 53.8 in the previous month to signal the slowest rate of expansion in the current 13-month sequence. Anecdotal evidence suggested that output growth reflected higher order book volumes.

Continuing the trend that started in May 2009, the volume of incoming new work in the Indian private sector rose during November. Although sharp, the pace of expansion was the slowest in one year. Services firms linked growth in new orders to rising demand, increased marketing and maintained quality of services.

Employment at private sector companies increased during November, the ninth successive monthly rise registered. Although manufacturing and services firms both signalled higher employment, the overall rate of job creation was only slight.

Anecdotal evidence suggested that payroll numbers were increased to meet production requirements.

November data signalled persistent inflationary pressure in the Indian private sector as input and output prices both increased. Rates of inflation were sharp and solid respectively. According to respondents raw materials, fuel, gold, transport and labour costs were higher.

Meanwhile, the volume of work-in-hand (but not yet completed) at private sector companies in India rose for the fourth consecutive month during November. With manufacturing companies reporting an accumulation but service providers signalling a depletion, the overall pace of increase was only slight.


Optimism was signalled in the Indian service sector during November. Moreover, the degree of positive sentiment was the strongest in three months. Activity in the upcoming year is forecast to increase in line with maintained brand reputation, stronger marketing and anticipated rises in demand.

Read more about: hsbc pmi economy
Story first published: Wednesday, December 5, 2012, 11:48 [IST]
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