India’s service sector activity hit a six-month low in January as businesses faced coronavirus-induced restrictions and rising inflation, a survey released on Wednesday by analytics firm IHS Markit India showed.

The monthly purchasing managers’ index, or PMI, fell from 55.5 in December to 51.5 in January. It was 58.1 in November. A reading above 50 shows an expansion, while a lower reading indicates a contraction in manufacturing or service sector activities.

Pollyanna De Lima, economics associate director at IHS Markit, said that the escalation of the pandemic, fueled by the Omicron variant, and reintroduction of curfews had a detrimental impact on growth across the service sector, according to the report.

“Concerns about how long the current wave of Covid-19 would last dampened business confidence and caused job shedding,” Lima said in the survey report. “Firms were also alarmed about price pressures.”

The report said that January data pointed to a drop in private sector employment for a second successive month.

“Despite being modest, the rate of job shedding accelerated from December,” it added. “A quicker fall among goods producers was matched by a similar trend among service providers.”

On the price front, the report suggested that there was a “strong increase” in expenses among service providers, with the overall rate of inflation climbing to its highest since December 2011.

“Survey members noted higher food, fuel, material, staff and transportation costs,” the report said.