India services activity at 3-month low
March 3, 2016, 6:54 am
![service sector now accounts for more than half of India's GDP [Xinhua]](http://thebricspost.com/wp-content/uploads/2016/03/132853098_21n.jpg)
Service sector accounts for more than half of India’s GDP [Xinhua]
Growth in India’s services industry slowed sharply in February as rising prices lead to a slight deceleration in demand, a business survey showed on Thursday. Growth of private sector new orders eased to a three-month low.
The Nikkei/Markit Services Purchasing Managers’ Index (PMI) sank to 51.4 in February from January’s 54.3.
The 50-level distinguishes growth from contraction.
““India’s economic growth softened during February, with slowdowns evident across both the manufacturing and service sectors. Demand conditions in the country appear to be weak, as indicated by lacklustre increases in new orders. Although PMI data still signal expansions in output and incoming new work, recent figures are considerably low by historical standards,” said Pollyanna De Lima, economist at Markit.
Customers may have been deterred by prices rising at their fastest rate in eight months as firms passed on higher input costs.
The sub-index for new orders – a proxy for domestic and foreign demand – dropped to 51.3 in February from 54.1.
“According to survey participants, weak growth of new work weighed on hiring decisions. Meanwhile, manufacturing employment broadly stagnated,” said the Markit report.
As the government is set to hike salaries later this year, price pressures are likely to pick up.
TBP and Agencies
