Read more about May Services PMI shrinks to 46.4 vs 54 in April; lowest level since Aug on Business Standard. Overall demand contracted at the sharpest rate since August, with foreign demand shrinking at the fastest pace since November
Reuters
3 minute read A waiter walks past tables that have been blocked to maintain social distancing at restaurant after they reopened amidst the spread of the coronavirus disease (COVID-19) in Mumbai, India, October 8, 2020. REUTERS/Francis Mascarenhas/File photo
Activity in India s dominant services industry contracted in May for the first time in eight months as strict lockdowns to curb the second wave of COVID-19 dampened demand, prompting firms to cut jobs at the fastest pace since October, a private survey showed.
Despite a recent slowdown in reported infections, the South Asian nation is still recording well over 100,000 cases and over 3,000 deaths per day, forcing most provinces to keep tight restrictions on business activity in place.
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Covid-19 resurgence pushes service sector into contraction: IHS Markit ANI | Updated: Jun 03, 2021 12:19 IST
Firms became increasingly worried about growth prospects with positive sentiment slipping to a nine-month low. Jobs were shed to the greatest extent since last October.
Cost inflationary pressures cooled but remained sharp by historical standards with the latest rise, the slowest since January. Selling prices meanwhile increased only slightly as several companies left their fees unchanged due to subdued demand conditions.
At 46.4 in May, down from 54 in April, the seasonally adjusted India Services Business Activity Index was in contraction territory for the first time in eight months.
India's dominant services activity entered contraction territory for the first time in eight months due to restrictions imposed during the second wave of Covid-19. As a result of reduces economic activity, services sector jobs have also suffered.
The Nikkei/IHS Markit Services Purchasing Managers Index fell to a nine-month low of 46.4 in May from 54.0 in April, sliding below the 50-level that separates growth from contraction for the first time in eight months