India’s services sector activity growth slips to 12-month low

  1. According to Nikkei India Services Purchasers manager Index(PMI) ,services sector activity has slowed down to 50.2 in May,2019 from 51.0 in April,2019.
  2. This slowdown has happened due to disruptions arising from the elections in the month of May which had affected the growth of new work intake.
  3. However,the index has said that the slowdown may be temporary as companies has stepped up hiring and became more confident about future prospects.
  4. PMI or a Purchasing Managers’ Index (PMI) is an indicator of business activity — both in the manufacturing and services sectors.It is a survey-based measures that asks the respondents about changes in their perception of some key business variables from the month before.The
  5. PMI is derived from a series of qualitative questions.Executives from a reasonably big sample,running into hundreds of firms are asked whether key indicators such as (a)output (b)new orders (c)business expectations and (d)employment were stronger than the month before and are asked to rate them.
  6. The headline PMI is a number from 0 to 100.The figure above 50 denotes expansion in business activity.Anything below 50 denotes contraction.
  7. The rate of expansion can also be judged by comparing the PMI with that of the previous month data.If the figure is higher than the previous month’s then the economy is expanding at a faster rate. If it is lower than the previous month then it is growing at a lower rate.

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