India's services sector lost momentum in July, with growth slowing to its weakest pace in about four and a half years. The latest reading pointed to a clear cooling in activity as new business inflows eased in both the domestic market and overseas markets.
The softer demand backdrop appears to have weighed on the broader economy. Alongside the slowdown in services, manufacturing activity also moderated, contributing to a decline in the composite PMI measure that tracks overall private-sector performance.
A services PMI reading above 50 still signals expansion, but the latest figure shows that growth has become much more subdued than in previous months. The slowdown in new orders suggests businesses are facing a more cautious spending environment, rather than a sharp contraction.
With both services and manufacturing losing pace at the same time, July's data indicates a weaker start to the second half of the year for India's private sector. The figures highlight how softer demand, at home and abroad, is beginning to affect the country's growth momentum.
