India’s services activity slowed to a four-month low in September due to weak demand and stagnant new work. The Nikkei/IHS Markit Services Purchasing Managers’ Index dropped to 50.9 in September from 51.5 in August.
A reading of over 50 in this survey-based index marks expansion.
Despite a slight improvement in the manufacturing sector, where output growth strengthened, the composite PMI for manufacturing and services fell to a four-month low of 51.6 in September. In September, the reading was 51.9.
Companies reported that market conditions were underwhelming amid a lack of demand at a time of generally higher prices. Average output price inflation was the strongest recorded since April and marked a twentieth successive monthly increase in prices charged.
The services activity index is based on a survey conducted among purchasing executives of more than 400 services providers divided into five categories: consumer services, transport & storage, information & communication, financial & insurance, and real estate & business services. Underlying growth in activity and new work remained strongest in information & communication. In contrast, there were falls seen in the finance & insurance and business services categories. Business services continued to record the weakest trends in new work.
Confidence among service providers about the year ahead remained inside positive territory. Around 22% of the survey panel signaled expectations for activity growth, with market demand forecast to strengthen.
Marketing and the offering of high quality services are also expected to bolster activity.