PMI: business expectations drop to all-time low
Indian business seems to have been spooked by the turmoil in the equity and foreign exchange markets
Private sector activity improved in August, with the composite Purchasing Managers’ Index (PMI), which takes into account both the manufacturing and services sectors, rising to 52.6 from 52 in July. A reading above 50 indicates expansion.
However, Indian business seems to have been spooked by the turmoil in the equity and foreign exchange markets.
It is perhaps one reason why the business expectations component of the PMI services index is at an all-time low.
However, the business expectations index has been falling steadily since the high reached in June last year, reflecting the disappointment with the lack of reforms by the Narendra Modi government.
Pollyanna De Lima, economist at Markit, said, “While the path ahead for the economy looks unclear, firms’ reluctance to hire persists. This uncertainty towards output expectations was highlighted by the services business expectations index dipping to a survey low."
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