Business

Services PMI shows slump easing, but job losses swell

A table is marked not accessible for customers to ensure social distancing at a hotel after restaurants in the state resumed their services Monday, months after they were closed due to the COVID-19 pandemic in Mumbai, India, Monday, Oct. 5, 2020. India, the second worst-affected nation in the world after the United States, is witnessing a sustained decline in new coronavirus infections and active virus cases have remained below the million mark for 14 consecutive days. (AP Photo/Rajanish Kakade)

A table is marked not accessible for customers to ensure social distancing at a hotel after restaurants in the state resumed their services Monday, months after they were closed due to the COVID-19 pandemic in Mumbai, India, Monday, Oct. 5, 2020. India, the second worst-affected nation in the world after the United States, is witnessing a sustained decline in new coronavirus infections and active virus cases have remained below the million mark for 14 consecutive days. (AP Photo/Rajanish Kakade)

The pace of contraction in services sector activity eased considerably in September after the government lifted some COVID-19 restrictions, but demand continued to shrink, prompting firms to cut more jobs, a business survey showed on Tuesday.

Signs of stabilisation in services are likely to provide more comfort to policymakers after a sister survey last week showed India’s manufacturing expanded at its fastest pace in over eight years, suggesting business conditions were gradually returning to normal in Asia’s third-largest economy.

The Nikkei/IHS Markit Services Purchasing Managers’ Index (PMI) bounced to 49.8 in September from August’s 41.8, a touch below the 50 mark that separates expansion from contraction on a monthly basis.

But September was the seventh straight month that activity had contracted, the longest such stretch since a 10-month run to early 2014.

“The relaxation of lockdown rules helped the service sector move towards a recovery in September,” Pollyanna De Lima, economics associate director at IHS Markit, said in a release. “Participants of the PMI survey signaled broadly stable business activity and a much softer decline in new work.”

The services sector accounts for about 55% of India’s economy and almost a third of its jobs.

Although improved from August, sub-indexes tracking domestic and foreign demand remained firmly in contraction territory, leading firms to cut their workforce for the seventh straight month, the longest streak.


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Printable version | Oct 7, 2022 11:10:09 am | https://www.thehindu.com/business/services-pmi-shows-slump-easing-but-job-losses-swell/article32786527.ece