India's Services Growth hit 18-month low: HSBC

As per the survey undertake by HSBC, in the month of May 2013, India’s services sector grew at its slowest pace in one and half years during the month of  April 2013 as costs for raw materials, petrol and labour increased considerably.

It is important here to note that the pace of hiring by private sector companies was also slowest in seven months, as per a monthly HSBC India survey of services sector managers.

Highlights of the Report

• The HSBC India Composite Output Index fell to 50.5 in April from 51.4 in March.
• The latest reading indicated that activity increased marginally and at the slowest pace since October 2011.
• The seasonally adjusted HSBC Business Activity Index declined to 50.7 in April from 51.4 in the previous month.
• Input prices saw further increase in April 2013— the trend continued for the 49th consecutive month — and cost of raw material, petrol and labour were higher, HSBC noted.
• The rates of increase in average selling prices were slower at both manufacturers and service providers.
•  Despite the fact that new businesses placed at services and manufacturing firms in India increased last month, the rates of expansion eased.
• The manufacturers cited power cuts while service providers mentioned extreme weather and challenging market conditions for such a trend.