India’s services activity contracted for the first time in eight months in May amid localised lockdowns to curb the second wave of Covid-19, with positive sentiment slipping to a nine-month low and jobs being shed to the greatest extent since last October.
The IHS Markit India Services Business Activity index fell to 46.4 in May from 54 in April. A reading above 50 indicates expansion, while a sub-50 one signals contraction.
“The intensification of the Covid-19 crisis and associated restrictions suppressed domestic and international demand for Indian services,” said Pollyanna De Lima, economics associate director at IHS Markit.
The IHS Markit India Services PMI is compiled from responses to questionnaires sent to a panel of around 400 service sector companies. The sectors covered include consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services.
As per the survey report, Real Estate & Business Services was the worst-affected segment out of the five monitored categories, recording the quickest declines in both new business and output, whereas Transport & Storage registered substantial increases in activity and sales.