Business activity in India's service sector weakened further in September, and at a faster pace than in the previous month, latest figures released by Markit Economics and HSBC Bank showed Friday.
The seasonally adjusted purchasing managers' index (PMI) for the service sector decreased to 44.6 in September from 47.6 in August. PMI readings below 50 indicate contraction of the sector, while those above 50 signal growth.
Driving the downturn, new business placed with service providers dropped for the third consecutive month in September, and at the fastest pace since February 2009. For the first time in the survey history, all six service sub-sectors recorded decline in new business.
The reduction in new business prompted companies to reduce their workforces during the month, marking the first job-cut in more than one-and-half years.
Input prices paid by service sector firms rose sharply in September amid increased fuel, food and transport costs. However, competitive pressures persisted and selling prices were raised only modestly.
The composite output index, a measure of the performance of the manufacturing sector as well as the service sector, dropped to 46.1 in September from 47.6 in August, indicating a further weakening of overall private sector activity. The latest score was the lowest in four-and-half years.
Reflecting the slump in business activity, sentiment among entrepreneurs turned less upbeat in September, with the corresponding indicator falling to its lowest level since February 2009, the survey showed.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.