New Delhi: India’s manufacturing sector ended the year on a solid note, according to an IHS Markit survey, with the services sector also expanding for the fifth consecutive month in December, albeit at a slower pace than the previous month.
The expansion was driven by increased demand, but concerns over another wave of Covid-19 and inflationary pressures cast a shadow on the outlook, a survey showed, according to Reuters.
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The Services Purchasing Managers’ Index, compiled by IHS Markit, released on Wednesday, declined from 58.1 in November to 55.5 in December. This is the lowest level since September, but just above the 50-mark that separates growth from contraction.
Pollyanna de Lima, economics associate director at IHS, said: “2021 was another difficult year for service providers and growth took a slight step back in December. Still, the latest readings compared the trend of the survey to sales and business activity.” pointed to strong growth in Market.
What is the status of service sector?
The new business sub-index remained above 50 for the fifth month on the back of improvements in the real estate and commercial services sectors, though growth slowed to a three-month low.
The export business remained under pressure due to travel restrictions due to the pandemic that has impacted international sales.
Business confidence was at a four-month high in December on strong demand, yet rising coronavirus infections kept it under control.
India this week recorded the highest number of Covid-19 cases since September, approaching 40,000 cases in a day, taking the total number of infections to nearly 35 million.
Higher prices for transportation, vegetables and medical equipment boosted input costs, but firms reduced that burden on customers.
According to a Reuters poll taken last month, the central bank is unlikely to raise interest rates until the next quarter, as inflation has remained within its 2 per cent- 6 per cent target range since July.
According to the report, firms cut their workforce in December due to shortage of skilled workers, breaking the three-month recruitment trend. De Lima said, “Uncertainty about the outlook, and a general lack of pressure on capacity, led to a fresh decline in employment during December. It says the decline was modest and is expected to improve this year, with demand for services favourable.” Will continue.” ,
The overall composite index eased from 59.2 in November to 56.4 in December, the lowest since September but is supported by a strong manufacturing.
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