India’s services growth falls to six-month low: Nikkei PMI

Mumbai, June 3 (IANS) Growth in India’s private sector output declined in May as manufacturing and service sectors lost momentum in conditions of softer domestic demand, while services slowed sharply to a six-month low, a business survey on performance of the services sector showed on Friday.

The Nikkei Services Purchasing Managers’ Index for India fell from 53.7 in April to 51.0 in May.

An index reading of above 50 indicates an overall increase, while below 50 an overall decrease. The PMI series of data are published by the leading global diversified provider of financial information services “Markit”.

“Ongoing weakness in manufacturing and services was evident in May, with output growth losing momentum for a second straight month. Overall expansion across the two sectors was the lowest since last November, as was the case for new orders,” Pollyanna De Lima, economist at Markit, was quoted as saying in the report.

The services new business sub-index, which reflects both domestic and foreign demand, fell to a 10-month low of 50.9 in May from 53.7 in April, that could mainly be on account of firms raising prices at a faster pace.

The survey revealed, however, that service providers continued to be optimistic about growth picking up pace in the year, with the business expectations sub-index remaining in the positive zone.

The Nikkei Manufacturing Purchasing Managers’ Index released on Thursday rose marginally to 50.7 in May from 50.5 in April.

“Following broadly stagnant levels in April, order book volumes increased during May. The pace of expansion was, however, only slight and well below its long-term average,” the Markit report said.

“Data implied that growth was centred on the domestic market as new business from abroad decreased,” it added.

The Reserve Bank of India is due to announce its second bi-monthly monetary policy review of the fiscal coming Tuesday in the backdrop of official data showing retail inflation in the country rose in April to 5.39 percent.

–IANS

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