India's services sector growth in Nov'23 slips to year low on weak new orders

The overall rate of growth of India’s services sector softened in November 2023 to reach its weakest since November 2022, as growth in for total new orders lost momentum.

- NIVEDITA MUKHERJEE

Granular data showed widespread slowdowns in rates of growth for both new orders and output across the four broad areas of the service economy. The November data also signalled the weakest rise in private sector activity across India for a year. The seasonally adjusted S&P Global India Services Business Activity Index fell from 58.4 in October to a one-year low of 56.9 in November. Finance and insurance topped the rankings, while real estate and business services came last.

International demand for Indian services improved further but, as for total new orders, growth lost momentum. The latest increase in new export orders was moderate and the slowest since June. Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence observes that India's service sector has lost further growth momentum midway through the third fiscal quarter amidst continuity in robust demand for services fuelling new business intakes and output.

"The current rates of expansion look very healthy when considering their respective long-run averages and the outlook for business activity remains bright in spite of optimism fading due to rising inflation expectations," says De Lima.