activity in March, PMI at 54.6
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Synopsis
Companies that noted higher output linked the upturn to the elections, rising sales and improved demand while some firms mentioned that low footfall, consumer uncertainty and the Covid-19 crisis led to a reduction in activity at their units and re...
The pace of expansion of services activity in India slowed in March, curbed by the Covid-19 pandemic and low footfalls, leading to job shedding for the fourth straight month, a private survey showed Wednesday.
The India Services Business Activity Index fell to 54.6 in March from 55.3 in February but stayed above the 50-mark on the index that separates expansion from contraction.
Companies that noted higher output linked the upturn to the elections, rising sales and improved demand while some firms mentioned that low footfall, consumer uncertainty and the Covid-19 crisis led to a reduction in activity at their units and restricted the upturn.
The consecutive six-month upturn was associated with the elections, higher demand and successful marketing.
“The escalation of the pandemic and the reinstatement of restrictions could
cause a notable slowdown in growth during April,” said Pollyanna De Lima, Economics Associate Director at IHS Markit, adding that service providers hope for an improvement in vaccine availability, which would curb the spread of the disease and support the economy.
External demand for Indian services continued to worsen, with new orders from abroad decreasing for the thirteenth straight month, according to the survey.
Services companies reported higher expenses in March. The rate of input cost inflation was sharp and outpaced its long-run average, despite slowing from February's eight-year high.
As per the survey, sub-sector data pointed to growth of output and sales in Consumer Services, Finance & Insurance and Transport & Storage. Information & Communication and Real Estate & Business Services propped up the rankings, posting declines in new work and business activity.
Overall activity
A sister survey on Monday showed manufacturing activity in India growing at its slowest pace in seven months, restricted by the Covid-19 pandemic.
Put together, growth of Indian private sector output eased in March and the Composite PMI Output Index was at 56, down from 57.3 in February, signalling expansion for the seventh month running. Aggregate employment decreased further, marking a 13-month sequence of job shedding.
Though softer increases were recorded in the manufacturing and service sectors, new business received by private sector companies rose for the seventh consecutive month.
The India Services Business Activity Index fell to 54.6 in March from 55.3 in February but stayed above the 50-mark on the index that separates expansion from contraction.
Companies that noted higher output linked the upturn to the elections, rising sales and improved demand while some firms mentioned that low footfall, consumer uncertainty and the Covid-19 crisis led to a reduction in activity at their units and restricted the upturn.
The consecutive six-month upturn was associated with the elections, higher demand and successful marketing.
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“The escalation of the pandemic and the reinstatement of restrictions could
cause a notable slowdown in growth during April,” said Pollyanna De Lima, Economics Associate Director at IHS Markit, adding that service providers hope for an improvement in vaccine availability, which would curb the spread of the disease and support the economy.
External demand for Indian services continued to worsen, with new orders from abroad decreasing for the thirteenth straight month, according to the survey.
Services companies reported higher expenses in March. The rate of input cost inflation was sharp and outpaced its long-run average, despite slowing from February's eight-year high.
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Looking ahead, companies expect business activity to increase over the course of the coming 12 months based on rising client enquiries and hopes for greater vaccine availability. The overall level of confidence was unchanged from February.As per the survey, sub-sector data pointed to growth of output and sales in Consumer Services, Finance & Insurance and Transport & Storage. Information & Communication and Real Estate & Business Services propped up the rankings, posting declines in new work and business activity.
Overall activity
A sister survey on Monday showed manufacturing activity in India growing at its slowest pace in seven months, restricted by the Covid-19 pandemic.
Put together, growth of Indian private sector output eased in March and the Composite PMI Output Index was at 56, down from 57.3 in February, signalling expansion for the seventh month running. Aggregate employment decreased further, marking a 13-month sequence of job shedding.
Though softer increases were recorded in the manufacturing and service sectors, new business received by private sector companies rose for the seventh consecutive month.
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