New Delhi [India], May 5 (ANI): The Indian service sector remained resilient to the escalation of Covid-19 crisis with a further solid increase in new work supporting output expansion, according to the latest IHS Markit Services Purchasing Managers' Index (PMI) released on Wednesday.
Still, panel member reports suggested that the rise in business activity was constrained by the pandemic and sentiment towards growth prospects faded.
Meanwhile, service providers noted the steepest rise in overall expenses since December 2011. Charges increased only slightly, however, as firms sought to boost sales.
Falling from 54.6 in March to 54 in April, the seasonally adjusted India Services Business Activity Index pointed to the slowest increase in output for three months.
The latest reading was indicative of a solid rate of expansion that outpaced the long-run survey average. Anecdotal evidence indicated that ongoing growth of new work underpinned the rise in output which was nevertheless stymied by the Covid-19 crisis intensification of Cos.
The rate of increase in new business matched that seen in March. Sub-sector data indicated that business activity and sales expanded in three of the five broad areas of service economy, the exceptions being information and communication and real estate and business services.
Transport and storage was the brightest spot in April. Indian services firms were optimistic regarding the 12-month outlook for business activity but the overall level of positive sentiment fell to the lowest since last October.
Although private sector activity continued to expand markedly, growth eased to the weakest in 2021 so far.
"One area of concern was inflation. Services firms noted the steepest rise in overall expenses in over nine years as global shortages of inputs and higher transportation costs continued to exert upward pressure on outlays," said Pollyanna De Lima, Economics Associate Director at IHS Markit.
"The gap between rates of inflation for input prices and charges was one of the widest since the global financial crisis," she said.
The IHS Markit India Services PMI is compiled from responses to questionnaires sent to a panel of around 400 service sector companies. The sectors covered include consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services.
The panel is stratified by detailed sector and company workforce size based on contributions to GDP.
IHS Markit is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government. (ANI)