Survey cites improved market conditions, easing of curbs

Survey cites improved market conditions, easing of curbs

Indian services sector activity ended the seven-month sequence of decline and registered growth in October, supported by improved market conditions amid easing COVID-19 restrictions, a monthly survey said on Wednesday.

At 54.1 in October, up from 49.8 in September, the seasonally adjusted India Services Business Activity Index posted above the 50.0 no-change mark for the first time since February.

A print above 50 means expansion and a score below that denotes contraction, as per the IHS Markit India Services Purchasing Managers’ Index (PMI). “It’s encouraging to see the Indian services sector joining its manufacturing counterpart and posting a recovery in economic conditions from the steep deteriorations caused by the COVID-19 pandemic earlier in the year,” said Pollyanna De Lima, Economics Associate Director at IHS Markit.

Ms. Lima further noted that “while a revival of the manufacturing industry began in August, only now the service sector started to heal. Service providers signalled solid expansions in new work and business activity during October.”

New work intakes

Services companies reported an increase in new work intakes, which they attributed to successful marketing efforts and strengthening demand. On the job front, there was another monthly decline in employment. The pace of job shedding was solid and matched that recorded in September.

“Survey participants indicated that workers on leave had not returned and that a widespread fear of COVID-19 contamination continued to restrict staff supply,” Ms. Lima said.