Business flows revive sagging services sector in September: HSBC

NEW DELHI: Activity in the services sector picked up in September on stronger new business flows, although sentiment moderated in the post-election period, according to a private survey on Tuesday. The sector, which accounts for over 55% of the total income generated in the country, had faced a downturn for more than a year, due to a poor showing by manufacturing.

HSBC’s Purchasing Managers’ Index for services rose to 51.6 points in September from 50.6 in August, reversing the declines of the preceding two months. It was the fifth straight month of expansion, with a reading above 50 indicating growth and a level below that contraction. “Services sector activity bottomed out in September thanks to stronger new business flows.

However, business sentiment continues to deteriorate after a strong post-election uptick,” said Frederic Neumann, co-head of Asian economic research at HSBC. Official data released by the Central Statistics Office showed that the services sector expanded 6.8% in the Q1 of 2014-15 against 7.2% in the year-ago period.

The services PMI, compiled by financial information services company Markit, is based on a survey of purchasing executives in about 350 private service sector companies. Business activity rose in half of the six monitored sub-sectors, with the sharpest expansion in post & telecommunications. New work intakes across the private sector as a whole expanded at a reduced pace during the month due to a marked deceleration in new-order growth at manufacturers, the report said.