India’s Services PMI Improves For Fifth Straight Month

A gauge of India's services sector improved for the fifth straight month as economic activity picked up pace after the nation eased lockdown curbs. Still, it's just a tad below the expansion zone.

The India Services Business Activity Index, compiled by IHS Markit, stood at 49.8 in September compared with 41.8 in August, according to a media statement. A reading below 50 indicates a contraction in business activity. The services sector makes up more than half of India's gross domestic product.

With manufacturing activity also improving, the Composite PMI Output Index rose to 54.6 in September from 46 in August. That came as Manufacturing PMI jumped to the highest in more than eight years in September.

Overall, new businesses continued to decline for the seventh straight month. But the pace of contraction was moderate and the weakest since March. New orders from abroad, too, contracted at the slowest pace in six months.

Services employment dropped for the seventh month in a row and at a quicker rate than in August. While some firms lowered headcounts due to ongoing declines in new work intakes, others reportedly attempted to increase them but could not find suitable candidates for current job openings, the release said.

There was a sharp rise in outstanding business at companies operating in the Indian services sector for the quarter ended in September. Moreover, the rate of backlog accumulation was little-changed from August's survey record.

Input prices rose in September, with monitored companies citing higher fuel, meat and vegetable costs. As such, prices charged for the provision of services increased during September, as was the case in August.

September marked the first month since April in which service providers were confident towards future growth prospects.