According to the Services Purchasing Managers’ Index report done by HSBC, growth in India’s services segment gradually decreased last April as demand slowed down. This pushed outsourcing firms to postpone hiring plans.
The Index report, which surveyed 400 companies, dropped to 50.7 last April - the weakest figure during the expansion cycle and lowest since October 2011.
March of this year posted the third straight month of the Index’s weakening, and is close to the 50 mark, which is an unfavourable position.
With India being the third largest economy in Asia, and services (60 percent) as its key revenue generator, this type of slump is definitely bad news. The manufacturing segment of the country also declined.
The latest business index was at its highest in January of this year after 18 months. However, it declined to 52.6 in April of this year, from 53.3 in March, also of this year.
Meanwhile, HSBC economist and survey sponsor Leif Eskesen said the stunted growth in new businesses affected the services sector and resulted to slower employment growth.
The crisis in Europe, India’s key market, is also affecting the demand for services.