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Service sector output remained stagnant in November, marking its slowest rise in four months as new orders remained weak and business sentiments fell to their lowest level in a decade.
The Nikkei Services Business Activity Index fell to 50.1 in November from an eight-month high of 53.2 in October.
A reading above 50 on the Index indicates expansion while a score less than 50 reflects a contraction in output.
“Owing to weak demand across the country, services companies saw the slowest rise in incoming new work since July.
“As a consequence, business activity stood still and confidence waned.
“Sentiment dropped in November to reach a survey low, as firms were concerned about stuttering demand and tough economic conditions,” said Pollyanna De Lima, economist at Markit. Indicating a similar stagnation in overall economic activities in the country, the Nikkei India Composite Purchasing Managers Index Output Index, too, fell to a five-month low of 50.2 in November from 52.6 in October.
Sluggish private sector “It was indicative of little change in private sector activity in India,” the report said, adding that growth of incoming new work also eased in the month.
Among sub-sectors in service industries, transport and storage, and hotels and restaurant firms saw a sharp decline in the month, which also offset growth in financial intermediation, post and telecom, renting and business activities and other services.
Input costs rise “Survey members blamed fierce competition and frail economic conditions for the slowdown in growth of new work,” said the release, adding that input costs rose for the second straight month due to costlier food and petrol but most service companies did not increase the final prices.
The data indicating poor service sector performance comes just days after government data revealed that the Indian economy grew at its fastest pace in six months, at 7.4 per cent, in the quarter ended September 30.
The manufacturing sector PMI survey, which was released on Tuesday, had revealed that factory output grew at the slowest pace in 25 months in November.
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