New Delhi, July 5 (SocialNews.XYZ) The second wave of the Covid-19 pandemic heavily dented India's service sector output in June, which contracted at the fastest pace since July 2020.
The survey data indicated that services firms endured further losses of new business as the emergence of the second wave and the reintroduction of containment measures restricted demand.
Consequently, the seasonally adjusted India Services Business Activity Index contracted to 41.2 (index value) in June, down from 46.4 reported in May.
The seasonally adjusted index reading remained above the critical 50-mark that separates growth from contraction.
"Monitored companies commonly indicated that the intensification of the Covid crisis and tight restrictions curbed demand for services," IHS Markit said in the PMI report.
"Subdued demand conditions resulted in a second successive monthly drop in new business received by the services firms. The pace of contraction was sharp and the quickest since July 2020," it said.
According to panel members, business activities and new orders decreased in four out of the five broad areas of the service economy, with the fastest rates of contraction registered in consumer services.
Transport and storage was the only segment to post growth.
"International demand for Indian services deteriorated further in June, with new export orders falling for the 16th consecutive month. The pace of contraction remained sharp despite easing from May," the report said.
The report also noted a second successive 60 monthly decline in private sector business activity across India.
Resultantly, the Composite PMI Output Index fell to 43.1 in June from 48.1 in May.
According to Pollyanna De Lima, Associate Director at IHS Markit: "With India expanding its vaccine options and the government announcing ambitious plans to immunise the entire adult population by the end of the year, it is hoped that the pandemic can be brought under control and a sustainable economic recovery can begin."
Source: IANS
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