India PMI: Services Sector Slows In August Even As Business Sentiment Rebounds
India’s services sector activity slowed in August, a private survey showed today, even as the government announced measures to boost economic growth from a six-year low.
The IHS Markit India Services Business Activity Index fell to 52.4 in August compared with 53.8 in July. Yet, the index showed the sector expanded on the back of domestic tailwinds. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction, or pessimism.
“An important development, however, is evident in a rebound in business sentiment,” said Pollyanna de Lima, principal economist at IHS Markit. “Both manufacturers and service providers believe that supportive public policies can help shift growth momentum into a higher gear in the coming 12 months.”
The index remained above 50 as companies remained confident on the back of favourable government policies, improved technology and new business gains. While new business inflows softened over the previous month, growth sustained in four of the five sub-sectors, barring real estate and business services.
Firms hired in August following increase in new work and strong growth projections. The latest rise took the current stretch of job creation to two years and the pace of expansion remained above its long-run average despite easing from July, according to the survey.
Tracking the services index, the Composite PMI Output Index—which maps both the manufacturing and services industries—expanded for the eighteenth month in a row to 52.6 in August, lower than the index’s print of 53.9 in July. The latest figure was consistent with moderate rate of increase, the survey said.
Growth of total new orders waned from July, as did output, weighed by weaker expansion rates in both the manufacturing and services sectors, the survey said. More private sector jobs were added in August, but at a reduced rate, it said.