Adding to expectations of a rate cut by the Reserve Bank of India, growth in India’s services industry slowed sharply in February as rising prices lead to a slight deceleration in demand.
The Nikkei/Markit Services Purchasing Managers’ Index sank to 51.4 in February from January’s 54.3, but chalked up its eighth straight month above the 50-level that separates growth from contraction.
Although new orders at services firms continued to rise in February, the rate of expansion eased to the weakest since last November as firms reportedly faced strong competition for new work during the month, the survey said.
Meanwhile, the seasonally adjusted Nikkei India Composite PMI Output index, which maps both manufacturing and services sectors, dipped to 51.2 in February from January’s 11-month high of 53.3.
“India’s economic growth softened during February, with slowdown evident across both manufacturing and service sectors,” said Pollyanna De Lima, economist at Markit, which compiles the survey, adding that demand conditions in the country appear to be weak, as indicated by lacklustre increase in new orders.