Sept Services PMI Nears Growth, Highest Reading Since Feb

India's service sector shows signs of recovery in September when compared to the previous month, according to data from a private survey. Services PMI (Purchasing Managers' Index) for the month stood at 49.8 from 41.8 in August and 48.7 in September 2019, as per data analytics firm IHS Markit.

PMI figure above 50 indicates growth which below the level mean contraction.

While the reading in September was the highest since February this year, it has remained in the contraction territory for the seventh straight month.

The employment index fell to 46.8 from 48.2 in August, marking the seventh straight month of contraction.

New businesses rose when compared to August to their highest since March this year, as per IHS Markit.

"Participants of the PMI survey signalled broadly stable business activity and a much softer decline in new work intakes. Payroll numbers decreased further, but several firms reported that attempts to take on extra workers were hampered by a lack of available labour. Backlogs data suggest that hiring efforts will continue in the near term, however, we could see a better employment trend in coming months provided that people are willing to leave their hometowns in search for vacancies," said Pollyanna De Lima, economics associate director at IHS Markit.

The composite Purchasing Managers Index, which combines manufacturing PMI and services, stood at 54.6 in September when compared to 46 in August and 49.8 during the same period last year.

Data released last week by IHS Markit showed that manufacturing PMI was at 56.8 in September, the highest reading since January 2012.