Services PMI Hits 5-month Low

India's services sector barely expanded in November, slackening to a five-month low as weak demand took a toll on output and incoming work. The Nikkei Services Business Activity Index dropped to 50.1 from 53.2 in October, which was an eight month high.
A reading above 50 on the survey-based index shows expansion, while a figure below that indicates contraction. Weak demand across the country meant services companies had the slowest increase in incoming new work since July .
As a consequence, business activity stood still and confidence waned, according to a statement from Markit, the agency which compiles the survey . Data released by Markit earlier this week showed manufacturing PMI at a 25-month low of 50.3 in November.
The downbeat numbers seem out of sync with the national account numbers released on Monday that showed Indian economy expanded 7.4% in July-September quarter, faster than 7% recorded in the previous quarter.
Services sector expanded a strong 8.8% during the quarter.
The PMI sub-sector data showed that output growth in post and telecommunications, renting and `other services' categories was offset by decline in transport and storage, and hotels and restaurant firms, the latter recording a higher rate of reduction. 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.

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