Services sector output stagnated in November after four consecutive months of expansion, as business sentiments hit the lowest level in a decade and flow of new orders turned sluggish, a monthly survey showed on Thursday.
The Purchasing Managers’ Index for services sector fell to 50.1 in November, from an eight-month high of 53.2 in October, showing broadly unchanged levels of services sector activity across the country, as per the business survey conducted by Markit and Nikkei.
A reading of 50 divides growth and contraction.
The gloomy trend was also observed in the labour market, as employment rose at a pace that was historically muted.
“Service sector output in India broadly stagnated and confidence waned in November, following four consecutive months of increases,” the PMI survey said.
“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,” it said.
On the prices front, output prices in services sector however stabilised in November.
The survey members blamed fierce competition and frail economic conditions for the slowdown in growth of new work.
The latest data comes within days of the manufacturing sector PMI survey on Tuesday showing that the country’s factory output grew at the slowest pace in 25 months.
However, the latest government data has showed that India’s economy grew by 7.4 per cent in July-September quarter, outpacing China to become the fastest growing major economy.
The Reserve Bank has left its policy rates unchanged, as was widely speculated, and promised more easing when permitted within its key task of keeping inflation under check.