Services suffer worst slump in over 4 years

The PMI’s new business index fell to 45.0 in September from 46.6 in August,the weakest reading since February 2009.

Written by Reuters | Bangalore | Published:October 5, 2013 4:16 am

Activity at Indian services companies shrank at the fastest pace in more than four years last month,suggesting the slowdown in Asia’s third-largest economy still has some way to run,a survey showed.

The HSBC Services Purchasing Managers’ Index (PMI),compiled by Markit,slipped from 47.6 in August to 44.6 in September,its weakest since April 2009. That marked its straight third reading below 50,the threshold between growth and contraction.

It showed firms were less optimistic about the future and were cutting staff as new business dries up.

The PMI also capped the worst quarter for the Indian services sector,which accounts for nearly 60 per cent of the economy,in more than four years,stoking fears that growth in the three months to September will be weaker than April through June.

India’s economy grew just 4.4 per cent in the quarter to June,its weakest quarterly pace since the first three months of 2009.

“Service sector activity contracted further in September … as tighter financial conditions and heightened macroeconomic uncertainty weighed on growth,” said Leif Eskesen,chief economist for India at survey sponsor HSBC.

The PMI’s new business index fell to 45.0 in September from 46.6 in August,the weakest reading since February 2009.

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