India services output growth falls in September

India's services output grew at a slower pace in September than the month before, weighed down by tough economic conditions, a survey showed on Tuesday.

The Nikkei India Business Activity Index, which measures services output, fell to 51.3 from 51.8 in August, according to data released by financial information services firm Markit.

The level of outstanding business held by Indian service providers also fell in September for a third month in a row, the survey showed.

The loss of momentum in services output comes after data showed manufacturing activity in India also slowed in September.

Overall, Markit said Indian private sector output slowed in September as both manufacturing and service activity slowed. Private sector output, as measured by Nikkei India Composite PMI Output Index, fell to 51.5 in September from a five-month high of 52.6 in August.

The Nikkei Purchasing Managers' Index measures the health of a sector based on surveys of private sector companies. A reading above 50 denotes expansion.

The report mentioned that service providers kept the employment levels unchanged in September because of the slowdown, unlike their manufacturing counterparts which reduced jobs during the month.

Even though the Reserve Bank of India slashed its main policy rate for the fourth time in September, the report said that confidence remained weak among companies.

The report, however, expected the situation to improve in coming months. "Services activity is expected to rise over the coming 12 months, with firms linking optimism to favourable government policies, planned increases in marketing budgets and hopes of better economic conditions," it said.

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