January Services PMI Accelerates To 52.8; Firms Continue To Shed Jobs

India's services sector activity accelerated in January month owing to improvement in demand and consumer optimism driven by the roll out of the huge Covid 19 vaccinative drive, a private survey revealed on Wednesday. The growth witnessed goes in sync with results of a Reuters poll conducted last month which estimated Asia's third largest economy would see recovery from the coronavirus crisis more strongly than previously estimated.

The Nikkei/IHS Markit Services Purchasing Managers' Index (PMI) surged to 52.8 in January from 52.3 in December. The levels above 50 separate growth from contraction.

"The Indian service sector enjoyed good levels of activity in January, with new business volumes rising for the fourth successive month and growth rates for both measures picking up from December," noted Pollyanna De Lima, economics associate director at IHS Markit.

Further a sub-index that tracks new business also spiked last month primarily driven by sustained recovery in domestic demand. Nonetheless, export orders shrank for the eleventh consecutive month due to curbs put in place to control the spread of deadly coronavirus in major economies.

Meanwhile, firms continued to cut jobs, as they have been doing since the outbreak of the pandemic.

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