Services sector activities contract sharply in May

New Delhi, June 3

India’s service sector activities declined sharply in May as the coronavirus pandemic continued to impair business operations, restrict consumer footfall at shops and resulted in job losses, a monthly survey said on Wednesday.

Reflecting a fall in output at an “extreme rate once again”, the IHS Markit India Services Business Activity Index stood at 12.6 in May.

Although the headline figure rose from April’s unprecedented low of 5.4, the score remained at a level, which prior to the coronavirus pandemic was unparalleled in over 14 years of data collection and pointed to an extreme drop in services activity across India, the survey noted.

A print above 50 means expansion and a score below that denotes contraction, as per the IHS Markit India Services Purchasing Managers’ Index (PMI).

According to the survey, output sank sharply due to extended business shutdowns and very weak demand conditions.

“Service sector activity in India is still effectively on hold, latest PMI data suggest, as output fell at an extreme rate once again during May,” Joe Hayes, Economist at IHS Markit said. — PTI