Bengaluru: The Indian service sector expanded for the fifth consecutive in December, although at a slower speed than the previous month, because demand rises but concerns over other waves of Covid-19 and inflation pressure gives a shadow over prospects, a survey shows.
The Service Manager Index for Wednesday, compiled by IHS Markit, fell to 55.5 in December from 58.1 in November, the lowest since September but was still far above the 50-mark which separated the growth of contractions.
“2021 is another wavy year for service providers and growth taking simple steps in December.
However, the latest reading shows an increase in sales and business activities that are strong compared to the trend of survey,” said Pollyanna de Lima, Director of Economic Associate at IHS marked it.
The new business sub-index above 50 for the fifth month, supported by real estate sectors and business services, although the growth rate softened to a three-month low.
The export business continues to decline because of travel restrictions related to pandemics weigh on international sales.
Business confidence is at a four-month height in December about strong demand, but the increase in Coronavirus infection stores it.
India reported the highest number of Covid-19 cases since September this week, approaching 40,000 cases in a day, pushing the total infection calculation to around 35 million.
Prices of transportation, vegetables and medical equipment are higher in fuel input costs but the company passes less the burden to customers.
Reserve Bank of India is not expected to raise interest rates until the next quarter, according to Reuters last month, because inflation was in the range of 2 percent-6 percent since July.
The company cut their workforce in December, partly due to lack of skilled labor, violating a three-month recruitment trend.
“Uncertainty surrounding the prospects, and lack of pressure on capacity, causing a decrease in updated work during December.
That said, the decline was marginal and recovery expected this year to demand service to remain profitable,” De Lima said.
The overall composite index fell to 56.4 in December from 59.2 in November, the lowest since September but was supported by a strong manufacturing industry.
Service growth slowed in December, fixed inflationary pressure
