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September services performance weakens: Nikkei PMI | Canindia News

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September services performance weakens: Nikkei PMI

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CanIndia New Wire Service 0 comments

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Mumbai, Oct 6 (IANS) Growth in India’s private sector output declined in September as manufacturing and service sectors witnessed sluggish rise in conditions of softer domestic demand, a business survey on performance of services sector showed on Tuesday.

The Nikkei “Services Business Activity Index” for India fell from 51.8 in August to 51.3 in September.

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

“India’s economy lost steam in September with growth fading across both the manufacturing and service sectors,” Pollyanna De Lima, economist at Markit was quoted as saying in the report.

“The sluggish increase in private sector output mirrored softer demand conditions across the country, while growth of global demand for Indian goods also moderated.”

The index revealed that the slowdown influenced service providers to leave their work force levels unchanged in September.

“Looking ahead, service providers expect further setbacks, as highlighted by the Future Output Index sliding to its lowest mark in the history of the series,” De Lima said.

While an earlier Nikkei survey found the factory output for September had dropped to a seven-month low, on inflation the current report said that price pressures decreased in September.

“Lower commodity prices coupled with falling petrol costs resulted in an overall drop in average input prices. On the back of this, businesses lowered their tariffs,” De Lima added.

The composite PMI is based on data compiled from monthly replies to questionnaires sent to representatives in around 700 companies.

On the Reserve Bank of India’s (RBI) latest monetary policy review, De Lima said “the RBI continued its attempt to shift India’s growth momentum into a higher gear.”

“The repo rate was cut for the fourth time in 2015 so far and now stands at a four-and-a-half year low of 6.75 percent,” she added.

Along with a 50 basis points interest rate cut last week, the RBI also lowered its economic growth forecast for the current fiscal to 7.4 percent from its previous projection of 7.6 per cent.

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