India's services sector edges up to a five-month high

India's economy saw a fast expansion in private sector output, driven by sharp increase at manufacturers. Private sector output expanded at a faster pace in November, as the headline HSBC India Composite PMI Output Index climbed to a five-month high of 53.6, up from 51.0 in October. The latest increase was the seventh in consecutive months and solid overall.

Activity growth at goods producers was the strongest since February 2013, as the service sector was outperformed by manufacturing for the fifth month running.

Rising from 50.0 to 52.6, the seasonally adjusted HSBC India Services PMI Business Activity Index - a single question tracking changes in activity at Indian services companies on a month-by-month basis - was consistent with a solid expansion in service sector activity in November.

Moreover, the latest reading was the highest in five months, albeit below the series average. Post & Telecommunications was the best performing of the broad areas monitored, while contractions in activity were registered in Financial Intermediation and Hotels & Restaurants.

Indian service providers registered backlog accumulation for the second consecutive month in November. However, the rate of increase eased from the previous month and was moderate overall. Growth was recorded across the private economy for the ninth successive month.

Commenting on the India Services PMI^TM survey, Pranjul Bhandari, Chief India Economist at HSBC said: "Service sector activity grew in November, as new business rose for the seventh month running. Despite the uptick in order flows, business sentiment deteriorated, reminding us that continued policy action that addresses investor concerns is needed to sustain growth momentum. Meanwhile, prices dipped on falling commodity prices and increased competition."

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