Services sector activities decrease for the second consecutive month in October: report
New Delhi, November 5 () India's service sector activities declined for the second consecutive month in October and business confidence was affected amid concerns that difficult economic conditions could persist, a report says.
The IHS Markit India Services Business Activity Index stood at 49.2 in October and a reading below 50 indicates contraction.
The activity of the Indian services sector decreased for the second consecutive month in October, the first consecutive reduction since the second quarter of fiscal year 2017/18.
New businesses stabilized after the contraction in September, while job creation moderated. At the same time, concerns that persistent economic conditions will drag business confidence to its lowest level in almost three years, the report published Tuesday said.
He noted that cost inflation rose to a maximum of one year, but charges increased at a smoother pace as weak demand limited pricing power.
However, rising from 48.7 in September, the main figure indicated a marginal and slower rate of reduction. Anecdotal evidence highlighted moderate demand conditions, competitive pressures and a fragile economic situation, the report said.
Citing the October data, the report indicated that it indicated that the weakness of demand was focused on the domestic market, with exporters registering an increase in international sales, while the recovery of external demand was modest and the slowest in four months.
Pollyanna de Lima, principal economist at IHS Markit, said it was somewhat worrisome to see India's service sector stalled in a contraction, as companies react to low demand by reducing commercial activity. Perhaps even more worrying was the downward revision of future expectations, given the possible detrimental impact of moderate business confidence on investment and employment. The latter has already shown its weakest joint expansion in more than two years, he added from Lima. RAM MKJ