Wednesday, Jul 08, 2020 | Last Update : 06:42 AM IST

106th Day Of Lockdown

Maharashtra2171211185589250 Tamil Nadu118594711161636 Delhi102831742173165 Gujarat37636267441978 Uttar Pradesh2996819627313 Telangana2761216287313 Karnataka2681511100417 West Bengal2383715790804 Rajasthan2140416575472 Andhra Pradesh211979745252 Haryana1799913645279 Madhya Pradesh1562711768622 Bihar12525933898 Assam12523833016 Odisha10097670354 Jammu and Kashmir89315399143 Punjab67494554175 Kerala5895345228 Chhatisgarh3415272814 Uttarakhand3230262143 Jharkhand3018210422 Goa190311568 Tripura171612481 Manipur14307710 Himachal Pradesh107876410 Puducherry104351714 Nagaland6443030 Chandigarh4924017 Arunachal Pradesh270922 Mizoram1971390 Sikkim125650 Meghalaya94432
  Business   Economy  04 Oct 2019  India's services sector activity contracts in Sep on weak demand: PMI

India's services sector activity contracts in Sep on weak demand: PMI

PTI
Published : Oct 4, 2019, 11:54 am IST
Updated : Oct 4, 2019, 11:54 am IST

The IHS Markit India Services Business Activity Index fell to 48.7 in September from 52.4 in August.

According to the survey, new work intakes contracted in September, after an 18-month sequence of expansion. (Photo : Representational)
 According to the survey, new work intakes contracted in September, after an 18-month sequence of expansion. (Photo : Representational)

New Delhi: The country's services sector activity contracted in September and fell to its lowest level since February 2018, amid weak demand, competitive pressures and challenging market conditions, a monthly survey showed on Friday.

The IHS Markit India Services Business Activity Index fell to 48.7 in September from 52.4 in August, as lacklustre client demand weighed on the performance of the Indian service economy.

In Purchasing Managers Index parlance, a print above 50 means expansion, while a score below that denotes contraction.

According to the survey, new work intakes contracted in September, after an 18-month sequence of expansion. Firms said subdued demand conditions, unfair pricing among competitors and economic woes affected the sector.

As per the survey, growth of Indian private sector activity came to a halt in September, ending one-and-a-half-year sequence of expansion.

The Composite PMI Output Index that maps both the manufacturing and services sector fell from 52.6 in August to 49.8 in September, reflecting softer production growth and an outright reduction in services activity.

"Private sector output in India contracted for the first time since February 2018. This reflected a decline in sales, albeit fractional, which restricted employment growth. Worryingly, business sentiment sank to a 31-month low," said Pollyanna de Lima, Principal Economist at IHS Markit.

Challenging economic conditions hampered business sentiment in September, with optimism down at goods producers and service providers alike. Aggregate confidence fell to a 31-month low.

On the prices front, the survey said the latest results also highlighted subdued inflationary pressures in the sector, with input costs rising at the slowest rate in over two-and-a-half years.

"A drop in aggregate input cost inflation to its lowest in around three years raises the possibility of a further cut in the benchmark interest rate," Lima said.

Experts believe the Reserve Bank of India is likely to go for yet another rate cut at the fourth bi-monthly monetary policy for 2019-20 on Friday.

The RBI's Monetary Policy Committee (MPC) is slated to announce its fourth bi-monthly policy decision for this fiscal later in the day.

Tags: purchasing managers index, pmi, services sector, services, reserve bank of india, rbi, economy, growth
Location: India, Delhi, New Delhi