Service sector activities are showing improvement but according to this employment is not increasing. This is a matter of concern for the government.
The performance of the service sector is showing improvement due to positive sentiment and demand growth in the economy. After the commencement of Kovid vaccination, business sentiment has shown improvement and this has impacted the service sector. Due to this, the growth of the service sector reached the top of the last 11 months in January.
The biggest jump in transport, storage and consumer services
The Business Activity Index of IHS India Services rose to 52.8 in January, compared to 52.3 in December (2020). Transport, storage and consumer services recorded the highest jump during this period. New orders were entered in these sectors.
A score over 50 indicates a growth in business activity. Actually, with the advent of Corona vaccination, improvement in business sentiment is being seen. Due to this, demand is being seen in various industries in the service sector.
Speed is also seen in manufacturing
Along with the service sector, the manufacturing sector sentiment has also been good. In January, the manufacturing sector PMI increased to 57.7, while in December (2020) it was at 56.4.
According to SBI’s Composite Index showing manufacturing activity in the country, the manufacturing sector activity is showing growth. In December (2020) it was at 53.5 while in January it increased to 53.8.
Increased concern due to lack of pace in employment and exports
IHS said that companies in the service sector have increased orders due to price discounting and fee cuts. In the competition to raise new customers, companies have reduced the price of the product and cut the fees. However, the recruitment of companies has not been as fast. Lack of employment can prove to be a problem for the government.
Nidhi Malviya is fun loving girl. She writes at NoobFeeds about various topics related to Finance, Technology, Business etc.