 "Services PMI stagnates in Nov")
After posting a nine per cent growth in the second quarter of FY16, the services sector remained stagnant in November, as hotels, restaurants and the transport sector posted a contraction, the widely tracked Nikkei purchasing managers’ index (PMI) showed. The country’s largest sector had posted an eight-month high in the previous month.
Services PMI fell to 50.1 points in November from 53.2 in October. The November reading is close to 50 points, which represent flat activities in the sector.
Besides, services companies’ confidence in terms of outlook for the next 12 months dropped to the lowest level in 10 years owing to difficult economic conditions and weak demand.
According to Markit Economics, which compiles the PMI data, output growth in the financial intermediation, post & telecommunications, renting & business activities and ‘other services’ categories was offset by declines in transport & storage and hotels & restaurants firms.
It should be noted that the PMI survey is opposite to the finance ministry’s optimism on macroeconomic parameters. The ministry was looking at a slight uptick in booking of hotel rooms for business purposes to gauge some kind of economic recovery.
Hotels, transport, and communication sector grew 10.6 per cent in the second quarter of this financial year against 12.8 per cent in the previous quarter, according to official data. Markit said Indian services companies saw demand growth lose strength during November, leading to the slowest rise in incoming new work since July. Survey respondents blamed it on fierce competition and frail economic conditions.
Services PMI fell to 50.1 points in November from 53.2 in October. The November reading is close to 50 points, which represent flat activities in the sector.
Besides, services companies’ confidence in terms of outlook for the next 12 months dropped to the lowest level in 10 years owing to difficult economic conditions and weak demand.
According to Markit Economics, which compiles the PMI data, output growth in the financial intermediation, post & telecommunications, renting & business activities and ‘other services’ categories was offset by declines in transport & storage and hotels & restaurants firms.
It should be noted that the PMI survey is opposite to the finance ministry’s optimism on macroeconomic parameters. The ministry was looking at a slight uptick in booking of hotel rooms for business purposes to gauge some kind of economic recovery.
Hotels, transport, and communication sector grew 10.6 per cent in the second quarter of this financial year against 12.8 per cent in the previous quarter, according to official data. Markit said Indian services companies saw demand growth lose strength during November, leading to the slowest rise in incoming new work since July. Survey respondents blamed it on fierce competition and frail economic conditions.
Markit economist Pollyanna De Lima said, “Following an improvement in the previous month, India’s economic growth moved closer to stagnation in November. Gloomy PMI data show a broad-based weakness in output, with little prospects of a rebound apparent in the near term.”
Meanwhile, the growth of the services sector employment was only slight and below the 10-year survey average, while goods producers reported maintained staffing levels.
‘Consumer confidence at new low’
Consumer confidence fell for the third consecutive month in November to the lowest on record, as consumers continued to downgrade their expectations for the future path of the economy as well as their personal finances, according to the MNI Indicators.
The MNI India Consumer Sentiment Indicator fell slightly to 113.7 points in November from 114.1 in October, the lowest level since the start of the survey in November 2012. The sentiment has been declining over the past year and it has fallen sharply since April in spite of aggressive action from the Reserve Bank of India to boost economic growth this year. The indicators are based on a survey.