The seasonally adjusted S&P Global India Services PMIBusiness Activity Index fell to 58.4 in October, from a 13-year high of 61 in September, signaling the slowest rate of expansion since March.In Purchasing Managers’ Index (PMI) parlance, print above 50 means expansion while a score below 50 denotes contraction.
The survey is compiled from responses to questionnaires sent to a panel of around 400 service sector companies.
“Several companies managed to secure new contracts, but some mentioned subdued demand for their services and competitive conditions,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence. The October data highlighted the second-fastest upturn in international orders placed with Indian services companies since the series started in September 2014. Survey members noted gains from clients in Asia, Europe and the US.
“Export was an area of particular strength in October, with new business gains from Asia, Europe and the US boosting growth to its second-highest in the series over its nine-year history,” Lima added. On the price front, services companies in India reported an increase in their expenses in October, which they attributed to higher food, fuel and staff costs.
“Although survey participants passed these additional cost burdens on to clients, permitted by demand strength, the rise in charges could have been the trigger of the deceleration in sales growth. Moreover, a pick-up in inflation expectations in October dampened business confidence,” Lima added.