The seasonally adjusted Nikkei India Composite PMI Output Index fell to 51.5 in September from 52.6 in August, highlighting the weakest rate of expansion in the current period of growth. The slowdown reflected weaker increases in both manufacturing and services output. However, the September data also signalled a third consecutive monthly rise in private sector output across India.
Additionally the seasonally adjusted Nikkei Business Activity Index went down to 51.3 in September from 51.8 in August. The fall pointed to a slight and softer expansion of services output across the country. Whereas higher new business was reported to have led activity to increase, there were mentions that tough economic conditions weighed on growth.
Pollyanna De Lima, economist at Markit, which compiles the survey, said, "India's economy lost steam in September, with growth fading across both the manufacturing and service sectors. The sluggish increase in private sector output mirrored softer demand conditions across the country, while growth of global demand for Indian goods also moderated."
Commenting on the business slowdown, the economist said, "Vital to the resilience of India's economy, price pressures dissipated in September. Lower commodity prices coupled with falling petrol costs resulted in an overall drop in average input prices. On the back of this, businesses lowered their tariffs."
"Looking ahead, service providers expect further setbacks, as highlighted by the Future Output Index sliding to its lowest mark in the history of the series," the economist added.
Incoming new work at service providers also rose for the third month in succession during September, but the rate of expansion eased since August. Where growth was noted, this was attributed to improved marketing strategies and increased demand. New order growth in the goods producing sector also softened and was the weakest since June.
Services activity is expected to rise over the coming 12 months, with firms linking optimism to favourable government policies, planned increases in marketing budgets and hopes of better economic conditions. That said, the degree of confidence was the weakest registered in the survey history.