India’s services sector output fell in January: Report

The IHS Markit PMI reported a fall from 55.5 in December to 51.5 in January

India’s services sector output fell to 51.5 in January, a perceptible drop from December’s 55.5, IHS Markit PMI [Purchasing Managers' Index] said.

"This is the slowest rate of expansion in six months. The escalation of the pandemic and reintroduction of curfews had a detrimental impact on growth across the service sector. Both, new business and output. rose at slight rates that were the weakest in six months. Concerns about how long the current (trend) will last and dampened business confidence caused job shedding," said Pollyanna De Lima, Economics Associate Director at IHS Markit.

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“Service sector jobs declined for the second month running during January, owing to reduced output requirements among some businesses and future uncertainty,” stated IHS Markit. This indicated that there was an increase in outstanding business among firms. The backlog accumulation, however, was only slight.

While travel restrictions curbed international demand for Indian services, new export business fell only at a moderate pace. “Business activity growth across the Indian private sector was sustained at the start of the year, but lost considerable momentum, the report said.

The Composite PMI Output Index fell from 56.4 in December to 53 in January, signalling the slowest rate of expansion in the current six-month period of growth.

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