India's Services PMI Hits One-Year Low in November

The Services Purchasing Managers’ Index (PMI) in India revealed a decline to 56.9 in November, marking a one-year low compared to October’s 58.4. However, the sector maintained its expansion streak for the 28th consecutive month, remaining above the crucial 50-point threshold that separates expansion from contraction.

Composite PMI Decline

The composite PMI also saw a one-year low at 57.4, down from October’s 58.4.
A steeper decline was mitigated by an increase in the manufacturing index, rising to 56.0 from the previous month’s eight-month low of 55.5.

Insight from Economic Analyst

Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, observed a loss of growth momentum in India’s service sector in the third fiscal quarter.
Despite the slowdown, there’s noted robust demand for services, driving new business intakes and output.

Demand and Output Dynamics

S&P Global’s survey data reveals a significant increase in the output of India’s services sector in November, surpassing long-run averages.
Sales received a boost from new client wins, demand strength, and favorable market conditions.

New Orders and Overseas Demand

Widespread slowdowns were observed in the increase of new orders, suggesting a potential area of concern.
Overseas demand for Indian services improved but at the slowest rate since June.

Employment and Job Growth

While there’s a positive net result on jobs with a gain in employment, the rate of job growth hit its lowest point since April, indicating potential challenges.

Economic Outlook

Despite fading optimism due to rising inflation expectations, the current rates of expansion in both services and manufacturing sectors are considered healthy.
The outlook for business activity remains bright, supported by strong demand for services.

Important Questions Related to Exams

Q: Why did India’s Services PMI fall to 56.9 in November?

A: Despite hitting a one-year low, it remained in expansion for the 28th consecutive month. The dip was partially offset by an uptick in the manufacturing index.

Q: What influenced the Composite PMI’s decline to 57.4?

A: The drop mirrored the Services PMI trend but was cushioned by the manufacturing sector’s improvement.

Q: What factors impact the services sector dynamics?

A: Resilient demand, new client acquisitions, and favorable market conditions drove output growth, despite a widespread slowdown in new orders.

Q: How does the global scenario affect Indian services?

A: Overseas demand increased but at the slowest rate since June, impacting job growth, which, while positive, was at its weakest since April.

Find More News on Economy Here