India’s service sector remained under intense strain in June as business activity fell, and job losses due to lower business requirements and poor staff availability were reported making business sentiment slide deeper into negative territory, a private survey showed on Friday. The IHS Markit Services PMI in June was 33.7 as against 12.6 in May as the deterioration weakened owing to a stabilisation in output levels at some firms.
As per the survey report, around 59% of firms reporting no change in output since May, only 4% registered growth while 37% recorded a reduction.
“India’s service sector continued to struggle in June as the country’s coronavirus crisis worsened,” said Joe Hayes, Economist at IHS Markit.
Reflecting an “intensely challenging domestic picture in India”, Hayes said: “Simply put, the country is gripped in an unprecedented economic downturn which is certainly going to spill over into the second half of this year unless the infection rate can be brought under control”.
A sister survey on Wednesday showed
manufacturing downturn in India easing markedly in June as output and new orders fell but at slower rates.
Put together, the Composite PMI Output Index, which measures combined services and manufacturing output, rose to 37.8 in June, up from 14.8 in May but still below the crucial 50 level which separates growth from contraction.
Demand conditions facing both sectors remained subdued in June, although, as was the case with output, the service sector observed the stronger reduction in orders. Consequently, there was a broad-based decline in employment, according to the survey.
Source : Times of India