Services sector key to today's Q2 growth data

The country’s gross domestic product (GDP) numbers for the second quarter of this financial year, due to be issued tomorrow, would depend on how the services sector did.

This is not only because the tertiary sector is the largest contributor, at a little over 60 per cent of the economy. It is also because industry only partially recovered in the second quarter at an aggregate level.

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However, the secondary sector’s output contracted in two of the three months, July and September, of the three in the quarter. It had fallen in as many months in the first quarter as well.

Besides, agriculture might not give much of the relief, economists said, though the monsoon had recovered in August and September.

Thethe first quarter and grew by 0.15 per cent in the subsequent three months of this financial year.

There is no official figure for services in the second quarter. However, if one sees the HSBC purchasing managers' index (PMI), manufacturing growth averaged 54.9 points in the first quarter and fell to 52.8 in the second. Services expanded by 53.9 points in April-June but increased to 55 points in July-August.

PMI segregates expansion from contraction at 50 points. If PMI matches official data, the second quarter GDP might also get a boost from services sectors, as in the first quarter. However, the PMI is only a survey of 350-500 private sector companies. Besides, it is a month-on-month calculation, against the GDP year-on-year math.