Bangalore: India’s dominance Service area It expanded at its slowest pace in six months in January, as a new wave of Covid-19 cases and restrictions on demand due to rising prices, a private survey showed.
The IHS Market Services Purchasing Managers’ Index fell from 51.5 in January to 55.5 in December, well below the 53.0 expected in a Reuters poll of economists, but still well above the 50-mark separating growth from contraction.
“The escalation of the pandemic and the resumption of curfews have had a detrimental effect on growth in the services sector,” said Pollyanna de Lima, economics associate director at IHS Markit.
“Both new business and production grew at modest rates, the weakest in six months.”
The new business sub-index was at its weakest level since August as consumers stayed home amid rising coronavirus cases, curbing domestic demand.
International demand remained depressed and contracted for the twenty-third month, as it has been since the start of the pandemic. However, contraction was moderate and slowest in the sequence.
While the business expectation index remained above 50, it slipped to its lowest level since August, reflecting a waning positive sentiment.
“How long the current wave of Covid-19 will erode business confidence and there are concerns about job losses. Firms were also concerned about price pressures,” de Lima said.
Firms cut workforce for the second month in January due to weak demand.
Input costs hit 10-year highs due to increases in food, fuel, material, staff and transportation costs.
Inflation was one of the highest since data collection began in December 2005 and is likely to reinforce the idea that the Reserve Bank of India will raise interest rates in the next quarter to ease price pressures.
The slowdown in both manufacturing and services activity pushed the overall index to a six-month low of 53.0 from 56.4 in December last month.
The IHS Market Services Purchasing Managers’ Index fell from 51.5 in January to 55.5 in December, well below the 53.0 expected in a Reuters poll of economists, but still well above the 50-mark separating growth from contraction.
“The escalation of the pandemic and the resumption of curfews have had a detrimental effect on growth in the services sector,” said Pollyanna de Lima, economics associate director at IHS Markit.
“Both new business and production grew at modest rates, the weakest in six months.”
The new business sub-index was at its weakest level since August as consumers stayed home amid rising coronavirus cases, curbing domestic demand.
International demand remained depressed and contracted for the twenty-third month, as it has been since the start of the pandemic. However, contraction was moderate and slowest in the sequence.
While the business expectation index remained above 50, it slipped to its lowest level since August, reflecting a waning positive sentiment.
“How long the current wave of Covid-19 will erode business confidence and there are concerns about job losses. Firms were also concerned about price pressures,” de Lima said.
Firms cut workforce for the second month in January due to weak demand.
Input costs hit 10-year highs due to increases in food, fuel, material, staff and transportation costs.
Inflation was one of the highest since data collection began in December 2005 and is likely to reinforce the idea that the Reserve Bank of India will raise interest rates in the next quarter to ease price pressures.
The slowdown in both manufacturing and services activity pushed the overall index to a six-month low of 53.0 from 56.4 in December last month.
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