Updated: March 4, 2021 5:11:34 am
India’s services activity expanded at the fastest rate in a year during February, owing to a quicker increase in new orders. However, employment fell further for the third month in a row as the Covid pandemic restricted labour supply, a survey said.
The seasonally adjusted India Services Business Activity Index rose from 52.8 in January to 55.3 in February, pointing to the sharpest rate of expansion in output in a year amid improved demand and more favourable market conditions, IHS Markit said.
“Despite ongoing growth of total new business, service sector employment fell further during February. A number of companies suggested that the Covid pandemic restricted labour supply. The pace of job shedding accelerated from January, but was moderate overall,” it said.
Moreover, the roll-out of Covid-19 vaccines led to an improvement in business confidence towards growth prospects. “Worryingly, however, employment declined for the third month in a row and companies noted the sharpest rise in overall expenses for eight years,” it said.
Moreover, the latest services sector reading extended the current growth sequence to five months. “Survey participants linked the upturn to improved demand and more favourable market conditions. New work intakes expanded for the fifth straight month, and at the fastest pace over this sequence,” it said.
A number of companies suggested that the Covid pandemic restricted labour supply. The pace of job shedding accelerated from January, but was moderate overall.
Pollyanna De Lima, economics associate director at IHS Markit, said: “The February PMI data showed a solid growth performance for the Indian service sector which, alongside a robust upturn in manufacturing production, pushed up the Composite Output PMI to a four-month high.”
Meanwhile, Indian private sector output rose at the quickest pace in four months during February. The Composite PMI Output Index rose from 55.8 in January to 57.3, highlighting a sharp rate of expansion that outpaced the series average.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.