India Service Sector Analysis: According to a private study, India's dominant services sector grew at its slowest pace in six months in January, as restrictions placed by a new wave of Covid-19 cases and rising prices weighed on demand.
The IHS Markit Services Purchasing Managers' Index fell to 51.5 in January from 55.5 in December, well below the 53.0 forecast in a Reuters survey of economists but still above the 50-point threshold that separates growth from contraction.
"The pandemic's escalation and the restoration of curfews had a negative influence on growth across the service sector," said Pollyanna De Lima, IHS Markit's economics associate director. "Both new business and output increased at the slowest rates in six months."
Consumers stayed at home despite mounting coronavirus cases, stifling domestic demand, causing the new business sub-index to fall to its lowest level since August. International demand remained bleak and contracted for the third month in a row, as it has done since the pandemic began. The contraction, on the other hand, was modest and the slowest in the sequence. Although the business expectations index stayed above 50, it fell to its lowest level since August, signalling waning optimism.
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