The activities of the Indian Service sector has gone to a slower rate of contraction in July as compared to the previous consecutive five months which was a result of Covid-19 pandemic that observed disruption in new business activities and a large number of new job hirings got cancelled.
The IHS Markit provides Business Activity Index readings which are if below 50 indicates that there is a contraction in a business activity if the reading is above 50 it indicates expansion in business activity. And the Business Activity Index for the Indian services sector was standing at 34.2 in July as compared to 33.7 in June, which indicates a slower rate of contraction. A media release said that the latest reading is very close to the lowest reading that got recorded in 15 years of data collection which got surpassed because of the previous three months unprecedented falls.
Also on Monday, a press release said that in July the Indian Manufacturing Purchasing Managers Index (PMI) was standing at 46 as compared with the reading of June at 47.2.
Lewis Cooper an Economist at IHS Markit said, “The coronavirus pandemic and subsequent introduction of ‘lockdown’ measures continued to weigh heavily on the Indian service sector in July.” He also said that many panelists recently reported that this pandemic has resulted in weak demand for services and temporary closures of many companies.
IHS Markit said in its survey report, “Services firms remained pessimistic with regards to activity over the year ahead for a third consecutive month in July, with the proportion of survey respondents expecting a decline in activity levels outweighing those anticipating a rise.” All the negative sentiments were linked with the uncertainties caused by lockdown and severe economic recession was also expected.
With Warm Regards,