India’s November services PMI hits 5-month low

NEW DELHI: India's services activity broadly stagnated in November with the Nikkei Services Business Activity Index posting a five-month low of 50.2 compared with 52.6 in October, which was an eight-month high.

Weak demand across the country meant services companies had the slowest rise in incoming new work since July. As a consequence, business activity stood still and confidence waned.

A reading above 50 on the survey-based index shows expansion, while a figure below that indicates contraction. Sub-sector data showed that output growth in post and telecommunication, renting and ‘other services’ categories was offset by declines in transport and storage, and hotels and restaurant firms, the latter recording a sharper rate of reduction.

“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," said Pollyanna De Lima, economist at Markit, which compiles the survey.

The survey also cited fierce competition and frail economic conditions for the slowdown in growth of new work.

Order book volumes in the manufacturing economy increased for the 25th straight month, although at the weakest pace in this sequence.

On Tuesday, the same organisation had showed that India’s manufacturing growth slumped to a 25-month low in November due to a combination of lower demand, higher input costs and softening output.