Pace Of Services Growth Slows In September
India's services sector grew for a fifteenth straight month, although it came off from a 43-month high, pointing to a slower rate of expansion amid a slowdown in manufacturing.
The Nikkei India Services Purchasing Managers' Index (PMI), which tracks changes in activity at services sector companies on a monthly basis, stood at 52 in September, down from 54.7 in August, according to a release by Nikkei and Markit Economics.
A reading above 50 means the sector is expanding, while a reading below that level means contraction.
Service sector performance in India continued to improve relatively modestly in September, a trend that has been evident throughout the year-to-date. With manufacturing also on a softer footing, the growth of private sector output and new orders eased in the latest month.Pollyanna De Lima, Economist, IHS Markit
Broadly stagnant staffing levels at services firms and manufacturers, a trend that has been evident throughout 2016 so far, contributed to higher backlogs.
The ongoing upturn in new work combined with muted employment growth led backlogs of work across the private sector to increase at the quickest pace in nearly two-and-a-half years. As a result of this, businesses may be more willing to take on additional workers as we head to the year end.Pollyanna De Lima, Economist, IHS Markit
Reflecting softer expansions in activity at both service providers and manufacturers, the Nikkei India Composite PMI Output Index fell to 52.4 in September from August's 42-month high of 54.6.
Over second quarter of financial year 2016-17, however, the PMI Composite Output Index posted its highest reading since the January-March 2015 quarter, thereby suggesting a pick-up in GDP growth. This would be welcome by policymakers after the below-expectations figure of 7.1 percent year-on-year recorded in first quarter.Pollyanna De Lima, Economist, IHS Markit
Also Read: India's Manufacturing PMI Slows In September; New Export Orders Rise
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