NEW DELHI: The India Services Business Activity Index rose for the fifth straight month in September, from 41.8 in August to 49.8. touch below the 50 mark that separates growth from contraction. The Index compiled by IHS Markit India Services, showed that the unlocking of India’s economy had borne fruit with the service sector making a comeback.
“Amid reports of the relaxation of coronavirus pandemic 2019 (COVID-19) restrictions, Indian service sector output broadly stabilised during September,” the report said. “Encouragingly, survey participants were upbeat about the year-ahead outlook for business activity for the first time since April,” it added.
“The relaxation of lockdown rules in India helped the service sector move towards a recovery in September,” said Pollyanna De Lima, Economics Associate Director at IHS Markit. “Taking into account the performance of the manufacturing industry, a better picture of the Indian economy is painted.
Private sector output expanded for the first time in six months during September, and at an above trend rate, while the increase in sales was the first since February,” she added. However, on the flip side, while some firms lowered headcounts due to ongoing declines in new work intakes, others reportedly attempted to increase them but could not find suitable candidates for current job openings.
As a result, services employment decreased for the seventh month in a row and at a quicker rate than in August. Input prices rose in September, with monitored companies citing higher fuel, meat and vegetable costs. The overall rate of inflation was at a seven-month high, but remained below its long-run average. Prices charged for the provision of services in India increased during September, as was the case in August. Companies that lifted their fees indicated that additional cost burdens had been shared with clients.