NEW DELHI: As the speed of vaccination increased and offices started partially opening up, services grew for the first time in four months to a one-and-a-half- year high in August, IHS Markit Purchasing Managers’ Index (PMI) survey says. However, it did not improve hiring as companies continued to reduce their workforce, though at a slower pace than earlier.
The index rose to 56.7 in August, up from 45.4 in the previous month. A reading above 50 shows expansion and one below that means contraction. Companies attribute it to the re-opening of many establishments, increased footfall and a rise in activities.
The report said that firms had ample capacity to deal with the rising new orders, but this was also a factor which prevented job creation. Companies mentioned strong inflow of new work and improved demand conditions.
Several firms indicated having sufficient workers to meet demand needs. Pollyanna De Lima, economics associate director at IHS Markit, said less upbeat news came from the survey’s employment measure, with services jobs shrinking again amid sufficient capacity among firms to meet current demand needs.
“There was at least a slowdown in the pace of job shedding,” she said. She added that another worrying aspect was the evidence that inflationary pressures continued to mount. Services firms said that higher fuel, retail and transport prices pushed up their expenses in August.