As was the case with the manufacturing sector in April, growth in India’s services sector continued to slow in April with Markit’s PMI gauge slipping to 52.4.
The reading, the third month in a row that the index has fallen, was the lowest level recorded since January.
From March new orders rose, albeit at a slower pace. Elsewhere the 12-month outlook hit a 4-month high while input prices and backlogs continued to expand. Mirroring the performance of the manufacturing sector, the number of payrolls fell.
Markit economist Pollyanna De Lima said:
“The slowdown in the Indian service sector continued in April, with weaker activity growth reflecting softer demand conditions. Accompanying the subdued outlook in the opening month of the fiscal year, was a return to job shedding as companies maintained a cost-cautious approach. On the positive side, panellists’ confidence regarding the one-year outlook for activity improved,
indicating that firms are optimistic the current deceleration in growth is a temporary soft patch. Inflation rates for both input and output prices were weak by historical standards, providing the RBI with more scope for further rate cuts. An expansionary approach to monetary policy would, at a time when the economy is losing traction, provide much needed support for further growth.”