Service Sector PMI: Omicron, the new variant of the corona virus, is rapidly affecting the economy all over the world including India. Due to this, the activities of the service sector have slowed down.
Service Sector PMI: Omicron, a new variant of the corona virus, is rapidly affecting the economy around the world including India. Due to this, the activities of the service sector have slowed down. Last month, in December 2021, the activities of the service sector in the country reached a three-month low. According to a monthly survey released on Wednesday (January 5), business activity and sales growth slowed in December, while price pressures and fears of the next wave of corona affected the business sentiment. The Services Purchasing Index, prepared by IHS Markit, stood at 58.1 in November, which came down to 55.5 in the next month, December 2021. This figure is the lowest since September.
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Expansion in the service sector for the fifth consecutive month
Last month, the activities of the service sector remained sluggish but still it expanded. It can be understood in this way that in the language of Purchasing Managers Index (PMI) an index above 50 means expansion, while an index below 50 means contraction. In the last month of December also, services sector activity increased but sluggishly. IHS Markit’s economics associate director Paulianna de Lima says 2021 was a tough year for service providers and growth slowed in December, but new figures indicate stronger growth in sales and business activity than survey trends. .
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Hoping for improvement in the new year
According to Lima, there is still uncertainty due to the new variant of Corona and a general lack of pressure on capacity, which led to a decline in employment in December. However, this decline was modest and is expected to improve in the new year 2022. According to Lima, demand recovery is expected this year, due to which the condition of the service sector will be better.
Talking about the Composite PMI Output Index, it was at 59.2 in November, which slipped to 56.4 in the next month in December 2021. However, it still remained above the long-time average of 53.9. The Composite PMI Output Index measures services and manufacturing output combined.
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