India's private sector output falls for first time in 14 months: Survey
Updated: Jul 03, 2015 02:21:08pm
New Delhi, July 3 (KNN) In June, there was a decline in output in India’s private sector economy for the first time in last 14 months, a Markit report said adding that the pass on of rising services costs was reflected in a further increase in output prices during June.
Falling to 49.2, from 51.2 in May, the seasonally adjusted Nikkei India Composite PMI Output Index recorded below the crucial 50.0 threshold for the first time since April 2014.
Reductions in activity were centred at service providers, as manufacturing production rose during the month, Nikkei said in a release..
The seasonally adjusted Nikkei Services Business Activity Index posted 47.7 in June. Down from 49.6 in May to its lowest level since March 2014, the latest reading was indicative of a moderate rate of decline.
Business activity fell in five of the six monitored categories, the exception being Hotels & Restaurants. Underlying the drop in services activity was a further contraction in new business.
Order book volumes received by manufacturers, increased further, although at a modest and softer pace. Incoming new work across the private sector as a whole fell, ending a 13-month sequence of growth. Despite the lack of incoming work, services companies indicated that outstanding business increased during June.
There were mentions of delayed payments from clients. Backlogs of work at manufacturers also rose marginally, the release said.
Indian service providers raised employment further in June. The rate of job creation was, however, only marginal and slower than the long-run series average. Manufacturing workforce numbers were broadly unchanged in the latest month.
The pass on of rising services costs was reflected in a further increase in output prices during June. However, charges were raised at a slight rate that was below the series long-run trend. A weaker rise in tariffs was also noted in the goods-producing sector.
Commenting on the Indian Services PMI survey data, Pollyanna De Lima, economist at Markit, which compiles the survey, said “June’s Indian service sector data disappointed, with reductions in both activity and new business accelerating since May. The heatwave and competitive pressures were again reported to have weighed on service providers’ performance. However, companies are hopeful of turning the corner in coming months, with confidence regarding the 12-month outlook remaining strong.
“Growth of manufacturing production was insufficient to offset the decline in services output and private sector activity fell for the first time since April 2014 during June. The Composite Output Index fell from an average reading of 53.3 in January-March to 51.0 in the three months to June, suggesting that GDP growth have weakened in the April quarter.
“On the positive side, inflation rates softened in June. Weaker rises in input costs and output charges were seen across both the manufacturing and service sectors. All in all, latest data suggest that the RBI’s commitment to support economic growth may result in further rate cuts at its August meeting, probably the last in 2015.” (KNN Bureau)
Falling to 49.2, from 51.2 in May, the seasonally adjusted Nikkei India Composite PMI Output Index recorded below the crucial 50.0 threshold for the first time since April 2014.
Reductions in activity were centred at service providers, as manufacturing production rose during the month, Nikkei said in a release..
The seasonally adjusted Nikkei Services Business Activity Index posted 47.7 in June. Down from 49.6 in May to its lowest level since March 2014, the latest reading was indicative of a moderate rate of decline.
Business activity fell in five of the six monitored categories, the exception being Hotels & Restaurants. Underlying the drop in services activity was a further contraction in new business.
Order book volumes received by manufacturers, increased further, although at a modest and softer pace. Incoming new work across the private sector as a whole fell, ending a 13-month sequence of growth. Despite the lack of incoming work, services companies indicated that outstanding business increased during June.
There were mentions of delayed payments from clients. Backlogs of work at manufacturers also rose marginally, the release said.
Indian service providers raised employment further in June. The rate of job creation was, however, only marginal and slower than the long-run series average. Manufacturing workforce numbers were broadly unchanged in the latest month.
The pass on of rising services costs was reflected in a further increase in output prices during June. However, charges were raised at a slight rate that was below the series long-run trend. A weaker rise in tariffs was also noted in the goods-producing sector.
Commenting on the Indian Services PMI survey data, Pollyanna De Lima, economist at Markit, which compiles the survey, said “June’s Indian service sector data disappointed, with reductions in both activity and new business accelerating since May. The heatwave and competitive pressures were again reported to have weighed on service providers’ performance. However, companies are hopeful of turning the corner in coming months, with confidence regarding the 12-month outlook remaining strong.
“Growth of manufacturing production was insufficient to offset the decline in services output and private sector activity fell for the first time since April 2014 during June. The Composite Output Index fell from an average reading of 53.3 in January-March to 51.0 in the three months to June, suggesting that GDP growth have weakened in the April quarter.
“On the positive side, inflation rates softened in June. Weaker rises in input costs and output charges were seen across both the manufacturing and service sectors. All in all, latest data suggest that the RBI’s commitment to support economic growth may result in further rate cuts at its August meeting, probably the last in 2015.” (KNN Bureau)
Loading...
