InvestorQ : What does the latest Services PMI number indicate for Dec-20?
Rutuja Nigam made post

What does the latest Services PMI number indicate for Dec-20?

2 years ago

For the month of December 2020, the PMI Manufacturing was marginally higher at 54.2. However, the PMI Services for Dec-20 tapered to 52.3 from 53.7 in the month of Nov-20. This is slightly disconcerting news for the Indian economy as services account for nearly 60% of the total GDP. This could have a negative impact on the Dec-20 quarter GDP.

The good news is that the purchase manager index or PMI figure is still above 50. That is indicative of an expansionary service sector as 50 is the cut-off. However, the loss of momentum over November is evident since the PMI figure is sharply down. It may be recollected that the PMI manufacturing had marginally moved up in December.

According to IHS Markit, which brings out the study each month, the spike in Coronavirus cases added to the uncertainty in the market. This effectively depressed the services sector. While domestic demand was robust, global demand lagged. As a result global orders slackened. Like in the case of PMI Manufacturing, the job creation was negative in the services sector indicating that companies are laying off people to cut costs.