There seems to be little signs of recovery in the Indian economy, with the services sector now seeing near stagnation and slumping to a 5 month low. This comes close on the heels of manufacturing data, that was not too encouraging.
The seasonally adjusted Nikkei India Composite PMI Output Index dropped to a five-month low of 50.2 in November.
This was indicative of little-change in the level of private sector activity in India. Growth of manufacturing production softened to the slowest in the current 25-month sequence of expansion, while services activity broadly stagnated.
Down from October's eight-month high of 53.2 to 50.1 in November, the seasonally adjusted Nikkei Services Business Activity Index pointed to broadly unchanged levels of services activity across the country.
Sub-sector data indicated that output growth in the Financial Intermediation, Post & Telecommunication, Renting & Business Activities and ‘Other Services' categories was offset by declines at Transport & Storage and Hotels & Restaurants firms. In fact, the latter recorded a sharper rate of reduction.
Commenting on the Indian Services PMI survey data, Pollyanna De Lima, economist at Markit, which compiles the survey, said:"Following an improvement in the prior month,India's economic growth moved closer to stagnation in November. Gloomy PMI data show a broadbased weakness in output, with little prospect of a rebound apparent in the near term.
"Owing to weak demand across the country, services companies saw the slowest rise in incoming new work since July. As a consequence, business activity stood still and confidence waned. Sentiment dropped in November to reach a survey low, as firms were concerned about stuttering demand and tough economic conditions.
Indian services companies saw demand growth lose strength during November, leading to the slowest rise in incoming new work since July. Survey members blamed fierce competition and frail economic conditions for the slowdown in growth of new work. Order book volumes in the manufacturing economy increased for the twentyfifth straight month, although at the weakest pace in this sequence.