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Business activity in India’s service sector grew at the second-slowest pace in the 12-month period of growth in June, said Markit. The seasonally adjusted Nikkei India Services Business Activity Index dropped to 50.3 in June from May’s 51.
On the contrary, manufacturing production growth expanded to a three-month high that in turn helped in a robust rise in private sector activity. The seasonally adjusted Nikkei India Composite PMI Output Index rose in June to 51.1 from May’s 50.9; however, it continued to stay below the long-run average and pointed towards a marginal rate of growth.
Services new business rose weakly in June, with growth slowing to 11-month low. Anecdotal evidence implied that solid competitive pressures limited new business gains. Outstanding business at service providers rose for the first time in five months, although marginally. The survey participants noted postponement in client payments. Goods manufacturers have also noted a slight accumulation in work-in-hand, stated Markit.
Service providers in India hinted at an increase in levels of staffing in June. However, employment grew slightly as just one percent of panellists registered job creation. These respondents stated that additional hiring showed increased output requirements.
Factory employment was largely unchanged in June. Input prices in the nation’s service sector grew for the ninth straight month in June with prices of vegetables and petrol reportedly up.
Cost inflation’s pace moderated and was lower than its long-run trend. Purchase prices amongst producers rose again; however, it was the weakest pace seen since March.
Meanwhile, prices charged by Indian service providers continued to increase. Panellists noted on the passing on of higher cost burdens. Sentiment amongst Indian service providers about future business activity gained in June. However, the degree of positivity was at a four-month low. Respondents noted that growth in activity will be underpinned by aggressive marketing campaigns in the coming year.
