Services downturn eases in April - PMI

BANGALORE Tue May 6, 2014 11:06am IST

A salesman waits for customers outside a clothing store at a shopping arcade in Mumbai July 3, 2013. REUTERS/Vivek Prakash/Files

A salesman waits for customers outside a clothing store at a shopping arcade in Mumbai July 3, 2013.

Credit: Reuters/Vivek Prakash/Files

Related Topics

BANGALORE (Reuters) - Activity in India's services industry contracted for a tenth straight month in April, pushing firms to put hiring plans on hold for the first time since November, a business survey showed on Tuesday.

The HSBC Services Purchasing Managers' Index, compiled by Markit, rose to 48.5 in April from 47.5 in March, but held stubbornly below the 50-mark that divides growth from contraction.

"While the business activity index improved, it remained below the water line. This points to still subdued service sector activity," said Leif Eskesen, chief economist for India and ASEAN at HSBC.

New business fell at a slower pace in April but the employment sub-index slipped just below the 50-level to 49.8 as firms reacted to falling workloads.

Still, firms remained optimistic about the future, possibly due to an anticipated victory for the business-friendly opposition Bharatiya Janata Party (BJP) in an ongoing election in the world's largest democracy.

Tuesday's business survey also showed input costs and prices charged by services companies increased at a quicker pace last month.

In contrast, input and output prices rose at the slowest pace in about a year among Indian factories, a similar poll of manufacturers found last week.

Indian factory growth showed no sign of acceleration last month as tepid demand restrained output even as price pressures eased.

The mixed picture will give little reason for the Reserve Bank of India (RBI) to change its key interest rate from 8 percent and a Reuters poll of economists in March said the bank would hold steady until October at least.

(Reporting by Deepti Govind; Editing by Kim Coghill)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Coal Block Allocation

Coal Block Allocation

Government urges Supreme Court to not cancel some 'illegal' coal mines  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit  Full Article 

Basel III Norms

Basel III Norms

RBI amends Basel III guidelines for banks  Full Article 

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Managing Share Sales

Managing Share Sales

Govt seeks bids from banks to manage PFC, REC share sales   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage