‘July services sector PMI signals rapid fall in output’

The services sector registered further rapid reduction in output in the wake of lockdown measures implemented to curb the coronavirus pandemic in July, as per the latest IHS Markit survey data.

The IHS Markit India Services Business Activity Index registered 34.2 in July. Even after rising slightly from 33.7 in June, it signalled a further rapid reduction in service sector output, it said.

The latest reading was among the lowest recorded in nearly 15 years of data collection, surpassed only by the unprecedented falls in the previous three months. A reading below 50 indicates contraction.

“Further substantial reductions in both activity and inflows of new work were recorded, as ongoing lockdown restrictions stifled demand and forced companies to cease operations,” the survey said. Subsequently, firms made further cuts to staff numbers, with the rate of job shedding the most marked on record.

Lewis Cooper, economist at IHS Markit, said: “The pandemic and subsequent introduction of “lockdown” measures continued to weigh heavily on the Indian service sector in July. Business activity and new orders dropped again, with the rates of decline remaining rapid overall.”

Panellists frequently reported temporary company closures and weak demand as a result of the pandemic.

The 12-month outlook for output was negative for a third successive month.