India Services PMI Contracts At A Slower Pace In August
Still, August’s was the highest reading since March.
A gauge of India’s services sector saw a pick up in August as economic activity gradually improves after the nation eased lockdown restrictions. Yet, it remained in the contraction zone.
The India Services Business Activity Index, compiled by IHS Markit, stood at 41.8 in August compared with 34.2 in July, according to a media statement. That's the highest reading since March. A reading below 50 indicates contraction in business activity.
The Composite PMI Output Index, which measures combined services and manufacturing output, rose from 37.2 in July to 46.0 in August, led by the spike in manufacturing PMI.
According to the survey respondents, the fall in output was linked to a further weakening of demand conditions in August. While some businesses resumed operations, others remained closed. New business placed at Indian service providers fell for the sixth month running in August amid weak market demand, the release said. But the rate of decline was the slowest in five months.
Continuing disruptions to work meant that incomplete work increased for a third month. Moreover, the pace of increase was substantial, and the fastest since the survey began in December 2005, according to the release. New export orders received by Indian service providers also fell, the release said.
Besides, service providers reported increased cost burdens for the second month running, led by higher fuel costs. Output charges, however, rose at a marginal pace.
With the services sector continuing to operate below capacity, firms reported job shedding for a sixth consecutive month. The fall in employment was only modest, however, and much slower than July's record.
Future sentiment was neutral in August, with two-thirds of panelists expecting output in the year ahead to remain unchanged on current levels.