Services sector remains subdued in November too

NEW DELHI: Activity in the services sector remained subdued for the fifth straight month in November, a private survey released on Friday showed, indicating no respite for the dominant sector of the economy that grew at its slowest pace in 12 years in the July-September quarter.

The HSBC purchasing managers’ index for services stood at 47.2 in November, against 47.1 in the previous month. A reading of below 50 on this survey-based index indicates contraction. “Services sector activity remains subdued, but it appears to be stabilising,” said Leif Eskesen, chief economist, HSBC, India and Asean.

Looking ahead, economic activity is expected to remain soft in the coming months as high inflation, tighter financial conditions and structural constraints continue to weigh on growth, Eskesen added. Lower business activity was recorded in five of the six broad sectors, the exception being post and telecommunications. The sharpest drop was seen in hotels and restaurants for the third successive month.

The employment sub-index dropped to 49.9 in November from 50.1, indicating lower hiring by services companies. The new business index was in the contraction zone for the fifth month running. The composite output index, that includes both manufacturing and services, remained below the 50 mark, but rose to 48.5 in November from the 47.5 reading in October.