Services PMI slows down in Sept amid sluggish new biz

New Delhi: The growth of India’s services sector eased in September from the recent high in August, as new business and activity expanded at slower rates, according to a monthly survey released on Monday. The seasonally adjusted HSBC India Services PMI Business Activity Index fell to 60.9 in September, from a 15-year high of 62.9 in August, amid competitive conditions and cost-control measures.

Notwithstanding the moderation, the September Services PMI index was well above the neutral mark of 50.0 to signal another substantial upturn in output. In the Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction. “Business activity in India’s services sector eased in September from the recent high August level. Most trackers moderated, but nothing in the survey suggested there is a big loss in growth momentum in services,” said Pranjul Bhandari, Chief India Economist at HSBC.

As per the survey, part of the slowdown reflected softer improvements in international demand for Indian services. External sales still rose in September, but did so to the least extent since March. Companies identified the supply of services at lower prices elsewhere as the main factor behind the slowdown in the growth of export orders. On the price front, the report said that the pace of inflation was modest, the slowest since March and broadly in line with the long-run series average, as prices charged for the provision of Indian services likewise increased at a weaker rate in September. According to the survey, job creation slowed during September.