Recovery in the services sector was sustained in November as new work orders supported business activity growth and the first rise in employment in nine months, a monthly survey said Thursday.
The seasonally adjusted India Services Business Activity Index posted above the critical 50 mark that separates growth from contraction for the second month in a row during November.
Despite falling from 54.1 in October to 53.7 in November, the latest reading was still indicative of a solid pace of expansion amid better demand conditions and a relaxation of Covid-19 restrictions.
“The Indian service sector continued to recover from the coronavirus-induced contractions recorded from March through to September. Companies enjoyed a further rise in new work intakes and responded to this by lifting business activity and employment,” Pollyanna De Lima, economics associate director at IHS Markit was quoted by PTI as saying.
Services firms hired additional workers in November, ending an eight-month sequence of job shedding. That said, the rate of employment growth was marginal overall as some companies reported having sufficient staff to cope with current workloads.
On the prices front, the rates of inflation for input costs and output charges accelerated.
“Low interest rates aimed at mitigating the negative impacts of Covid-19 on the economy and the latest rise in services employment are supportive factors for domestic demand. However, a pick-up in inflationary pressures could threaten the recovery,” Lima further said.
Looking ahead, services firms were confident of a rise in business activity in coming 12 months.
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