According to a monthly survey by IHS Market, India Services Business Activity Index climbed to 52.8 in January. It was at 52.3 in December. An increase in this means that there are signs of a sharp improvement in output. This remarkable improvement has been observed in the service sector due to the boom in business related activities and increasing positivity about business.
Significantly, the PMI Services Sector Index shows growth above 50. Whereas the data below it shows the contraction ie negative growth. According to experts, there was an increase in sales due to marketing efforts, reopening of some institutions and strengthening demand.
However, in the matter of inflation rate, in January also, the cost expenditure has increased for the seventh consecutive month. The companies involved in the survey have reported high fuel prices and an increase in the prices of many materials.
New business growth was seen in domestic markets only
Pauliana de Lima, Associate Director (Economist) at IHS Market, said: “There has been a good level of activity in India’s services sector in January. For the fourth consecutive month, an increase in new business volume and grath rate was observed. “According to the survey, new business was seen mainly in the domestic markets because there was a lack of new work related to export. This has happened due to the implementation of travel restrictions imposed by many countries and the decrease in international demand due to Kovid-19.
Things have not improved in terms of jobs
According to Lima, there are indications that due to rising costs, companies are avoiding the appointment of additional employees. Due to this, there was a decline in the second consecutive month on the employment front.