Business activity in India's services sector eased in September from a recent-high amid weak rise in international sales and slower expansion in new business, according to data released by S&P Global on Monday.
The seasonally-adjusted HSBC India Services PMI was 60.9 in September, well above the neutral mark of 50.0 that signaled substantial upturn in output. The PMI, however, fell from 62.9 in August, indicating a loss of growth momentum.
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"Most trackers moderated but nothing in the survey suggested there is a big loss in growth momentum in services. Instead, the Future Activity Index rose to its highest level since March, indicating strengthening optimism services companies about business prospects," Pranjul Bhandari, chief India economist at HSBC, said.
Operating conditions across India's service economy remained favourable during the month, with healthy demand trends underpinning further growth of total new orders, exports, employment and business activity. In all four cases, however, rates of expansion eased since August, the report said.
External sales rose in September at the slowest level since March. Companies identified the supply of services at lower prices elsewhere as the main factor behind the slowdown in growth of export orders, S&P Global said.
The services sector contributes over 50% to India's gross domestic product.
Job creation slowed during September. Employment rose at a modest pace, as fewer than 5% of monitored companies reported hiring growth, S&P Global said.
"Companies' assessments of growth prospects improved in September, with the overall level of positive sentiment reaching a six-month high. Survey participants identified several tailwinds to the year-ahead outlook for activity, including advertising, efficiency gains, plans to price competitively and tax cuts," the report said.
The HSBC India Services PMI survey covers sectors including consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services.
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