Friday, 21 January, 2022

India’s services growth slows in December

NEW DELHI: India’s services sector activity moderated to a three month low in December with many states imposing night curfews ahead of the Christmas season to curb the spread of Omicron.

Data released by the analytics firm IHS Markit showed that the Purchasing Managers’ Index (PMI) for services fell to 55.5 in December from 58.1 in November. A reading above 50 indicates expansion in economic activity and a number below that signals contraction. Manufacturing PMI for December had also declined to a three month low, data released on Monday showed, report agencies.

“Underlying data suggested that the latest increase in new orders was centred on the domestic market, as new business from abroad fell further. The deterioration in international demand was linked to COVID-19 restrictions, particularly around travelling,” the data analytics firm said.

December data also showed renewed job shedding in the service economy, but the rate of contraction was only slight. “In fact, the vast majority of surveyed companies (96 per cent) left payroll numbers unchanged from November. Firms generally suggested that employment levels were sufficient to cope with current workloads,” it added.

Pollyanna De Lima, economics associate director at IHS Markit said 2021 was another bumpy year for service providers and growth took a modest step back in December. “Services firms were generally confident that output would increase in 2022, but fears of new COVID-19 waves and price pressures somewhat hindered optimism. Uncertainty surrounding the outlook, and a general lack of pressure on capacity, led to a renewed fall in employment during December. That said, the decline was marginal and a recovery is expected this year should demand for services remain favourable,” she added.

According to the latest Google Mobility data for December 30, in Delhi, retail and recreation, public transport, workplace visits declined by 19 per cent, 7 per cent, and 17 per cent, respectively.