Advertisement

HindustanTimes Sat,20 Dec 2014

HSBC India services PMI slows to 6 month low in October

PTI  New Delhi, November 05, 2012
First Published: 13:42 IST(5/11/2012) | Last Updated: 13:46 IST(5/11/2012)

India's services sector slowed in October -- registering the slowest pace of growth since April -- amid decline in new orders and hiring levels, an HSBC survey said.

Advertisement

The HSBC's Services Purchasing Managers Index (PMI) for October declined significantly to 53.8 in October from 55.8 in September. Since November 2011, the index has kept above the 50-mark which indicates expansion.

Thus, the HSBC India Composite Output Index, which maps both services and manufacturing activity, stood at 53.5 during the month, down from September reading of 55.

"The services sector slowed in October, but remained firmly in expansionary territory. Growth in new orders eased slightly and firms scaled back the pace of hiring," HSBC Chief Economist for India and ASEAN Leif Eskesen said.

Output in the Indian service sector increased, amid reports of stronger demand and the rate of expansion, though "solid", was slowest since April. However, service providers remain optimistic about the short-term business outlook.

Earlier, an HSBC survey had shown that India's manufacturing sector improved in October, driven by new orders, but persistent power shortages weighed on production.

Moreover, the outstanding business rose reportedly due to delay in payments in October, which to some extent could also explain the slower pace of growth in business activity, Eskesen said.

"Inflation readings continued to tick up, with higher raw material costs and solid demand keeping inflation pressures firm. The latter explains why the RBI remains hesitant about easing monetary policy," he added.

Inflation as measured by all indices has remained elevated and Wholesale Price Index-based inflation has remained above the Reserve Bank's comfort zone of 5 to 5.5 per cent for quite some time now.

In the mid-year monetary policy review on October 30, RBI left the key interest rate unchanged but reduced cash reserve ratio by 0.25 per cent to infuse additional liquidity of up to Rs. 17,500 crore into the system.

RBI kept the repo rate and reverse repo rate unchanged at 8 per cent and 7 per cent respectively.

Meanwhile, on the employment front, job creation was recorded at private sector firms in India during October but the pace of growth was only slight and the slowest in three months, HSBC said.


Advertisement
more from Banking

CCEA gives nod for IDFs to take over bank loans

In a move that could boost the cash-starved infrastruc­ture sector, the Cabinet Committee on Economic Affairs on Tuesday gave its clearance for infrastructure debt funds (IDFs) to take over existing bank loans.
markets
Advertisement
Most Popular
Advertisement
Advertisement
Copyright © 2014 HT Media Limited. All Rights Reserved