Services PMI hits a 5-month low
Growth in services sector slipped to a five-month low in March on weaker rise in new orders and a sharp fall in business confidence, according to a private survey. The seasonally adjusted HSBC Services Business Activity Index fell to 52.3 from 56.5 in the previous month, data by HSBC Holdings showed. A reading of 50 separates growth from contraction. “Activity in the service sector decelerated notably in March, although it is still expanding,” said Leif Eskesen, chief economist for India and ASEAN at HSBC. “New business also ticked in at a slower pace and the sentiment gauge took a dive.” The index is based on data complied from replies to questionnaires sent to purchasing executives in 350 private companies. The service sector accounts for 65% of the Indian economy. The survey noted that rising prices had restricted the latest increase in new business. Along with the manufacturing sector, the rate of new order expansion slowed to a four-month low. Indian service sector companies, however, were still optimistic about the future and expected new gains in business due to the high quality of services provided and anticipated improvements in market conditions, the survey said. But, it said, business confidence was sharply down since February largely due to concerns over announcements in the budget. The survey also reported marginal job creation within the sector while work outstanding remained constant over the previous month. Price pressures remained as the latest increase in costs was marked and above the long run trend. It also pointed out that service sector output prices continued to rise solidly.