New Delhi: India's services sector contracted further in December amid a decline in incoming new orders in tough economic conditions, an HSBC survey said Monday.
The HSBC/Markit Purchasing Managers Index for the services industry fell to 46.7 in December from 47.2 in November, registering the sixth consecutive monthly drop in output levels, the longest period of continuous reduction since the 2008/2009 global financial crisis.
An index value of less than 50 indicates contraction.
"The service sector continues to face head winds, with weakening new business dragging down activity," HSBC Chief Economist for India and ASEAN Leif Eskesen said.
According to HSBC, new business contracted at the quickest pace since September amid an increasingly fragile economy and competitive pressures. The upcoming general elections had also contributed to the latest drop in new orders, it said.
The sharpest decline in new orders was noted in hotels and restaurants. The post and telecommunications sub-sector remained resilient, with growth in both business activity and new orders.
Last week, the HSBC/Markit manufacturing PMI showed India's manufacturing sector decelerated marginally to 50.7 in December as a slowdown in domestic order flows led to slower output growth.
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