HSBC India Services Business Activity Index recorded below the crucial 50.0 threshold for the first time in 13 months.
Registering 49.6 in May, from 52.4 in April, the seasonally adjusted HSBC India Services Business Activity Index recorded below the crucial 50.0 threshold for the first time in 13 months. Although indicative of falling output, the latest reading pointed to a marginal rate of contraction.
Commenting on the India Services PMI survey,Pollyanna De Lima, Economist at Markit said:“Disappointing May PMI data for India services indicated that the sector fell back into contraction after experiencing growth for six successive months. Restrained demand accompanied by sweltering heat and the earthquake led to falling new work.
Nonetheless, the sector is expected to see a rebound in coming months, as these factors fade away. An upturn in employment combined with improved business confidence further add to the evidence thatprospects may brighten.
Leading services activity to decline was a reduction in incoming new work, the first since April 2014. Competitive pressures and natural disasters were blamed for the decrease in new business inflows.Nonetheless, the rate of contraction was marginal overall. With manufacturing order books increasing at the quickest pace in four months, private sector new work rose. Nonetheless, the rate of expansion was the slowest in the current 13-month sequence of growth.
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