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India Business Activity Slows in June as Manufacturing, Service Cool, S&P Says
Business activity across India's private sector slowed in June due to a decline in the manufacturing and service sectors, according to final data compiled by S&P Global and released Friday.The final HSBC India Composite Purchasing Managers' Index slid to 57.1 in June from 59.3 in May, well above the 50.0 mark that separates expansion from contraction.Manufacturers and service companies lowered their output forecasts in June, while private-sector firms also restricted the increase in selling prices as cost pressures softened, S&P said in its note Friday.Aggregate sales volumes grew at their weakest pace within three months.Job creation was also at its weakest so far this year, according to S&P.India's services PMI, released the same day, declined to 57.4 from 59.8 in May, the slowest growth in 17 months, HSBC Chief India Economist Pranjul Bhandari said in the note.The figures show a loss of momentum amid challenging market conditions and slower interest for some services.While new export orders grew at the fastest pace in three months, slowing cost pressures also curbed charge inflation as tensions in the Middle East began to cool down, Bhandari said.Norder intakes also saw the slowest expansion in more than two and a half years, S&P said.Service companies that also saw growth noted "competitive" pricing, higher e-commerce demand, and enhanced tourism. Those that saw slower growth cited challenging market conditions and subdued client interest.Service companies paused hiring as staffing counts were sufficient for current needs.Outstanding business volumes saw stability in June, according to S&P.Exports also increased during the month on demand from clients in Australia, Belgium, Canada, Germany, Malaysia, Nepal, Oman, Qatar, Singapore, the UAE, and the U.S.India's manufacturing sector would also have to step up to offset the decline in services, CNBC reported June 26, citing Morgan Stanley Chief Asia Economist Chetan Ahya.The manufacturing PMI fell to 54.2 from 55 the previous month.
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