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Services sector contracts for first time in 8 months in May
IHS Markit said although service providers foresee renewed activity over the next 12 months, the overall degree of optimism has weakened to the lowest since last August.
India’s services activity contracted for the first time in eight months in May as stringent lockdowns imposed to curb the explosive second wave of the pandemic hit domestic business activity and international orders.
Trade deficit falls in May to $6.3 bn as imports dip
Data issued on Thursday by IHS Markit showed India’s purchasing managers’ index (PMI) for services fell to 46.4 in May from 54 in April. A figure above 50 indicates expansion, while a sub-50 print signals contraction.
The manufacturing PMI had fallen to its lowest in 10 months to 50.8 in May, barely managing to remain in the expansion zone, showed data issued on Monday by IHS Markit.
15.33 million Indians lose jobs in May
The data analytics firm said service providers struggled in May as the Covid-induced crisis worsened, causing renewed declines in new business and output. “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,” it said.
IHS Markit said although service providers foresee renewed activity over the next 12 months, the overall degree of optimism has weakened to the lowest since last August. “The pandemic and falling sales led services companies to reduce workforce again in May. The decline was modest, but the quickest in the current six-month sequence,” it added.
India’s factory activity falls to 10-month low
Pollyanna De Lima, economics associate director at IHS Markit, said while PMI data released on Monday showed that the manufacturing industry managed to keep its head above water in May, the services sector struggled as the pandemic escalated. “The Covid crisis and associated curbs suppressed domestic and international demand for services. Total sales fell for the first time in eight months, while the fall in external orders was the worst since last November,” she added.
