Extending the series of negative economic data, Services PMI posted a five-month low in November. The seasonally adjusted Nikkei Services Business Activity Index stood at 50.1 in November compared to 52.6 in October. Indian services companies saw demand growth lose strength during November, leading to the slowest rise in incoming new work since July.
While the growth of manufacturing production softened to the slowest in the current 25-month sequence of expansion, the services activity broadly stagnated resulting into the seasonally adjusted Nikkei India Composite PMI Output Index posting a five-month low of 50.2 in November compared to 52.6 in October.
Amid evidence of outstanding payments from clients, unfinished business in India’s private sector rose during November. That said, the rate of backlog accumulation was only modest, though, work-in hand increased at both manufacturers and service providers.
Growth of service sector employment was only slight and below the ten-year survey average. Regardless of the rise in cost burdens, services companies kept selling prices on hold in November. Around 97% of survey respondents indicated no change in their tariffs, citing limited pricing power amid weak demand conditions.
Most strikingly, Services confidence came at survey low, Services companies in India displayed a lack of optimism with regards to the 12-month outlook for activity, as sentiment dropped to the lowest in the ten-year survey history. Firms were concerned about stuttering demand and tough economic conditions.