Services PMI signals rise in activity for a second month

The recovery in the Indian services sector was sustained in November as new work orders supported business activity growth and the first rise in employment in nine months, a monthly survey showed on Thursday.

The seasonally adjusted India Services Business Activity Index posted above the critical 50 mark that separates growth from contraction for the second month in a row.

Despite easing to 53.7 in November, from 54.1 in October, the latest reading was still indicative of a solid pace of expansion.

“The Indian service sector continued to recover from the coronavirus-induced contractions recorded from March through to September,” said Pollyanna De Lima, Economics Associate Director at IHS Markit. “Companies enjoyed a further rise in new work intakes and responded to this by lifting business activity and employment,” she added.

Services firms hired additional workers in November, ending eight months of job shedding. However, the rate of employment growth was marginal as some companies reported having sufficient staff to cope with current workloads.

On prices, the rates of inflation for input costs and output charges accelerated.

“Low interest rates aimed at mitigating the negative impacts of COVID-19 on the economy and the latest rise in services employment are supportive factors for domestic demand. However, a pick-up in inflationary pressures could threaten the recovery,” Ms. Lima noted.

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Printable version | Feb 25, 2021 1:44:21 PM |

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