Services growth slowed in August, orders waned

Tags: Economy
Indian services activity expanded at its weakest rate in three months in August as firms' order books filled up at a slower pace, a business survey showed on Wednesday.

The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fell to 50.6 in August from 52.2 in July. A number above 50 denotes growth while anything below implies contraction.

The new business sub-index fell to 51.9 from 52.6, a three-month low.

Service firms were not alone in reporting lower order volumes. Factory surveys on Monday showed new orders slowed for companies across Asia and Europe as tensions between Russia and Ukraine escalated and a patchy recovery in China.

India's services activity expanded for the first time in May after shrinking for 10 months, right around the time Prime Minister Narendra Modi's Bharatiya Janata Party scored a landslide election victory that drove a wave of optimism.

That helped India's economy to grow at its fastest pace in two-and-a-half years in the quarter to June, data released last week showed.

But Modi is yet to launch sweeping reforms aimed at pushing the economy back to the double-digit growth rates of late 2009-early 2010.

"Services activity is once again turning down following a swift post-election uptick, suggesting that an improvement in reform momentum is needed to lift sentiment in the sector," said Frederic Neumann, co-head of Asian economic research at HSBC.

Firms' optimism about future activity, considered a good gauge for growth, was at a near-year low and suggesting inflation might cool both input prices and those paid by customers rose at a slower pace, the survey showed.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • E-auction and eventual privatisation of coal industry are welcome steps

    The government’s decision to privatise the scam-ridden coal industry through a presidential ordinance will eventually end the monopoly of public sec

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Sustainable model for rural sanitation

Prime minister Narendra Modi has promised to build a toilet ...

Rajgopal Nidamboor

Synchronous balance is vital for one and all

Imagine that you are playing an electronic game, or actually ...

Shona Adhikari

When women to birds become a painter’s muses

This week the focus is on renowned artist Amitabha Banerjee, ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture