Firstpost
  • Home
  • Video Shows
    Vantage Firstpost America Firstpost Africa First Sports
  • World
    US News
  • Explainers
  • News
    India Opinion Cricket Tech Entertainment Sports Health Photostories
  • Asia Cup 2025
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
Trending:
  • Charlie Kirk shot dead
  • Nepal protests
  • Russia-Poland tension
  • Israeli strikes in Qatar
  • Larry Ellison
  • Apple event
  • Sunjay Kapur inheritance row
fp-logo
PMI: Weak demand drags services activity into contraction in May, but businesses expect turnaround
Whatsapp Facebook Twitter
Whatsapp Facebook Twitter
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit

PMI: Weak demand drags services activity into contraction in May, but businesses expect turnaround

reuters • June 5, 2018, 11:42:27 IST
Whatsapp Facebook Twitter

The Nikkei/IHS Markit Services Purchasing Managers’ Index (PMI) fell to 49.6 in May from April’s 51.4, sinking below the 50-mark that separates growth from contraction.

Advertisement
Subscribe Join Us
Choose
Firstpost on Google
Choose
Firstpost on Google
PMI: Weak demand drags services activity into contraction in May, but businesses expect turnaround

Activity in India’s service industry shrank in May for the first time in three months as new orders stagnated, but business optimism was the highest since 2015 on expectations that demand will turn around, a business survey showed. The Nikkei/IHS Markit Services Purchasing Managers’ Index (PMI)  fell to 49.6 in May from April’s 51.4, sinking below the 50-mark that separates growth from contraction. While data last week showed Asia’s third-largest economy grew at its quickest pace in nearly two years, the latest PMI survey suggested it may have trouble maintaining that momentum. Last quarter’s faster growth, coupled with accelerating inflation, have dramatically changed expectations for the Reserve Bank of India’s monetary policy. It is now expected to change its stance to hawkish as early as a policy review on Wednesday and raise rates in August. [caption id=“attachment_4496453” align=“alignleft” width=“300”] ![Representational image. Reuters](https://images.firstpost.com/wp-content/uploads/2018/06/PMI_REUTERS-300x225.jpg) Representational image. Reuters[/caption] A recent surge in the price of oil, India’s biggest import item, and a sharp weakness in the rupee will be inflationary, keeping prices on an up-trend. While the jump in input prices was evident in the latest survey, firms continued to absorb most of the cost pressure to attract dwindling demand, pressuring profit margins. The new business sub-index, an indicator of domestic and foreign demand, fell sharply to 50.2 in May from April’s 51.4, near the neutral level and remaining well below the long-run mean average of 54.3. “The performance of the service sector was disappointing in May,” Aashna Dodhia, an economist at IHS Markit, said in a release.

“India saw the slowest improvement in the health of the overall economy since February in May, whilst the latest survey showed the effects of higher global oil prices as the private sector recorded the most marked input cost inflation for three months.”

The survey also showed firms were turning more cautious about hiring, with the pace of job creation easing to the weakest so far this year. If the labour market continues to soften, it could put pressure on Prime Minister Narendra Modi’s government ahead of next year’s general elections. A similar survey on Friday showed Indian factory activity grew at a weaker pace in May from the previous month, as weak domestic demand proved a drag on output. Taken together, they pushed the composite PMI - which includes both manufacturing and services - to 50.4 in May from April’s 51.9, barely above the 50 mark that shows growth and its lowest reading in three months. However, services firms remained optimistic about the future, with the business expectations index rising to its highest since January 2015. The performance of the service industry is crucial for India’s economy as it contributes about 60 percent to gross domestic product.

Tags
Inflation Narendra Modi Rupee NewsTracker manufacturing PM Purchasing Managers Index services PMI May
  • Home
  • Business
  • PMI: Weak demand drags services activity into contraction in May, but businesses expect turnaround
End of Article
Latest News
Find us on YouTube
Subscribe
  • Home
  • Business
  • PMI: Weak demand drags services activity into contraction in May, but businesses expect turnaround
End of Article

Impact Shorts

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Chennai leads India in challan checks, with drivers checking their e-challans over 5 times a month on average. Helmet non-compliance is the most broken rule, accounting for 34.8% of all traffic offences in Chennai. Regular digital challan checks help drivers avoid hefty fines, promote safe driving, and improve insurance premiums.

More Impact Shorts

Top Stories

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

Top Shows

Vantage Firstpost America Firstpost Africa First Sports
Enjoying the news?

Get the latest stories delivered straight to your inbox.

Subscribe
Latest News About Firstpost
Most Searched Categories
  • Web Stories
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Tech/Auto
  • Entertainment
  • IPL 2025
NETWORK18 SITES
  • News18
  • Money Control
  • CNBC TV18
  • Forbes India
  • Advertise with us
  • Sitemap
Firstpost Logo

is on YouTube

Subscribe Now

Copyright @ 2024. Firstpost - All Rights Reserved

About Us Contact Us Privacy Policy Cookie Policy Terms Of Use
Home Video Shorts Live TV