INSUBCONTINENT EXCLUSIVE:
The IHS Markit Services Purchasing Managers' Index slumped to 51.5 in January.Bengaluru: India's dominant services sector expanded at its
slowest pace in six months in January as restrictions due to a new wave of Covid-19 cases and surging prices weighed on demand, a private
survey showed.The IHS Markit Services Purchasing Managers' Index slumped to 51.5 in January from 55.5 in December, far below the 53.0
expected in a Reuters poll of economists but still above the 50-mark separating growth from contraction."The escalation of the pandemic and
reintroduction of curfews had a detrimental impact on growth across the service sector," noted Pollyanna De Lima, economics associate
director at IHS Markit."Both new business and output rose at slight rates that were the weakest in six months."The new business sub-index
was at its weakest since August as consumers stayed home amid rising coronavirus cases, curbing domestic demand.International demand
remained gloomy and contracted for a twenty-third month, as it has since the onset of the pandemic
However, the contraction was moderate and the slowest in this sequence.While the business expectations index remained above 50, it slipped
to its lowest reading since August, indicating dwindling positive sentiment."Concerns about how long the current wave of Covid-19 will last
dampened business confidence and caused job shedding
Firms were also alarmed about price pressures," added De Lima.Firms cut headcount for a second month in January due to the weaker
demand.Input costs spiraled to a 10-year high on increased food, fuel, material, staff and transportation costs.The rate of inflation was
one of the highest since data collection started in December 2005 and is likely to reinforce views that the Reserve Bank of India will raise
interest rates next quarter in a bid to cool price pressures.The slowdown in both manufacturing and services activity pushed the composite
index to a six-month low of 53.0 last month from 56.4 in December.(Except for the headline, this story has not been edited by
TheIndianSubcontinent staff and is published from a syndicated feed.)
