India’s services sector fell for the second consecutive month in April, with rates of new business and output growth both cooling to seven-month lows. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index eased to 51 in April from 52 in March. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services – also slipped to 51.7 in April as against 52.7 in March.
The survey report pointed that rise in incoming new work at services firms was only slight and the weakest in seven months, curtailed by greater online bookings among customers, competitive conditions and the elections. The report further said that the rise in employment was also moderate, though quickened from March, buoyed by ongoing improvements in new work and optimistic growth projections.
According to the survey report, Indian services firms continued to report greater levels of unfinished business during the month of April. It said that delayed client payment was cited as the key reason preventing firms from completing outstanding workloads. Backlogs also increased among goods producers.
On the inflation front, input price inflation in India’s service economy moderated to the second-slowest rate recorded in almost two years. In fact, close to 98% of companies indicated unchanged cost burdens from March. Across the private sector, the latest increase in input prices was the least pronounced in close to two-and-a-half years.