Service sector growth hits 13-month low in November

Reflecting the general slowdown in the economy, an HSBC survey said today that India's services sector growth declined in November to its slowest pace in 13 months.

The HSBC's Services Purchasing Managers Index (PMI) for November declined to 52.1, down from 53.8 in the previous month, signalling the slowest rate of expansion in the current 13-month sequence.

The index has witnessed a significant decline in the last two months after registering the fastest pace of growth in seven months in September. The index has, however, managed to be above the 50-mark which indicates expansion since November 2011.

"Business activity expanded at a slower pace in November and new business also grew at a slower clip, which in both cases may partly reflect the fewer working days due to Diwali," HSBC chief economist for India and ASEAN Leif Eskesen said.

However, service providers remain optimistic about the short-term business outlook. Activity in the upcoming year is forecast to increase in line with maintained brand reputation, stronger marketing and anticipated rise in demand.

"The forward-looking business expectation index improved notably, with some respondents reporting of planned business expansion," Eskesen said.