Growth of India’s private sector output faded in September, shows a new survey on Tuesday.
The Nikkei/Markit Services Purchasing Managers’ Index eased to 51.3 in September from August’s 51.8.
The 50-level separates growth from contraction.
“India’s economy lost steam in September, with growth fading across both the manufacturing and service sectors,” said Pollyanna De Lima, economist at Markit.
“The sluggish increase in private sector output mirrored softer demand conditions across the country, while growth of global demand for Indian goods also moderated,” she added.
The Markit survey mentions “tough economic conditions weighed on growth”.
“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. That said, the RBI continued its attempt to shift India’s growth momentum into a higher gear. The repo rate was cut for the fourth time in 2015 so far and now stands at a four-and-a-half year low of 6.75%,” said De Lima.
Incoming new work at service providers rose for the third month in succession during September, but the rate of expansion eased since August.
“Data indicated that private sector businesses passed falling input prices on to clients as tariffs were lowered on average. Although only marginal, the latest decrease in output prices was the first recorded since the financial crisis,” said a Markit statement.
India’s manufacturing activity also slowed to a seven-month low during the month as businesses struggle due to weak demand, both at home and overseas.
India’s central bank downgraded its 2015 growth estimates to 7.4 per cent from 7.6 per cent last week.