BANGALORE: Activity in India's services sector contracted at a faster pace in March as new business fell, and now the service industry has contracted to straight 10th month in April according to a survey done by Purchasing Managers Index and this resulted many firms to put a hold on their hiring plans, reports Reuters.
According to the survey the HSBC Services Purchasing Managers’ Index, compiled by Markit, rose to 48.5 in April from 47.5 in March. PMI 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.
With falling workloads the new business fell at a slower pace in April, but the employment sub-index slipped just below the 50-level to 49.8. But it seems that the firms still have hopes about the future, as they anticipate victory for the business-friendly opposition in an ongoing election in the world’s largest democracy.
According to the business survey the service companies increased their input cost and charges very fast last month. But when compared to this activity by the service sector industry the Indian factories raised their input and output prices at a very slower pace last year. Indian factory growth showed no sign of acceleration last month as tepid demand restrained output even as price pressures eased.
