Activity increased for the second consecutive month due to increase in demand; The round of layoffs going on for nine months is over, recruitments started
Services Activities Increased For The Second Consecutive Month Due To Increase In Demand, Started Hiring In September
TPN24 Desk 
Like manufacturing, activity in the service sector is also increasing, but its pace has slowed down on a monthly basis. An important point in this is that both the sectors are taking different steps from each other on one front. Last month i.e. in September, companies in the service sector started recruitment, while layoffs increased in the manufacturing sector.
Increased demand in the domestic market
According to a private survey, activity in the service sector increased for the second consecutive month due to increased demand in the domestic market and reduced restrictions related to Kovid. In view of this, for the first time after a year, companies in this sector started recruitment.
Services PMI stood at 55.2
The IHS Market Services Purchasing Managers' Index (PMI) stood at 55.2 in September. It had reached an 18-month high of 56.7 a month ago i.e. in August. Thus, the IHS Markets Services PMI remained above 50, indicating increased activity. Being below it means negative growth.
Companies get more new jobs
IHS Markets Associate Director-Economics, Pauliana De Lima, said, “Companies continue to reap the benefits of the recovery due to the reduction in cases of Kovid infection and the lifting of restrictions related to it. In September, due to better market conditions, companies were able to take more new jobs and increase their operations.
Foreign demand remains weak
According to the survey, the new business sub-index grew for the second month in a row, albeit at a slower pace in September. With the removal of restrictions related to Kovid by government agencies, the number of customers and the income of companies increased. This suggests that the domestic demand has improved, but the demand in the overseas market remains weak and has declined for 19 consecutive months.
Companies remain positive
The outlook for companies remains positive on expectations of a steady reduction in Kovid infections and easing restrictions, but growth prospects remain weak due to concerns about high inflation. The Reserve Bank of India (RBI) has set a range of 2%-6% for inflation, which according to a Reuters survey could remain near the upper limit of 5.4% this fiscal.
Input cost increased for 15 consecutive months
Input cost of companies increased for 15 consecutive months in September. The cost of raw materials and freight increased, but the companies did not pass on the increased cost to the customers. Experts say that despite all this, the RBI may refrain from increasing the interest rate because its focus is on increasing growth.
New recruitment started in the service sector
The good thing in September was that the service sector companies, which had been laying off for nine consecutive months, changed their stance and started new recruitment. However, the recruitment was very low, as companies are also meeting the increased demand by disposing of old jobs from the existing workforce.
Job recovery is not guaranteed
Pauliana said, 'The old work of the companies has come down. This means that companies have enough workforce to handle the growing workforce. So, recovery in the job market is not guaranteed to continue.
