India’s Services Activity Decreased in May Due to Lockdown, Sharp Job Cuts

India’s services activity decreased in May due to lockdown, sharp job cuts
A waiter walks past a table to maintain social distancing at a restaurant amid the spread of the coronavirus disease (COVID-19) in Mumbai, India, October 8, 2020. REUTERS/Francis Mascarenhas/File photo
Activity in India’s key services industry contracted for the primary time in eight months as strict lockdowns to curb the second wave of COVID-19 hit companies at the fastest pace since October, a private survey showed. Inspired to take a job.
Despite a recent slowdown in reported infections, the South Asian country remains recording quite 100,000 cases and quite 3,000 deaths per day, forcing most provinces to impose strict restrictions on business activities.
The Nikkei/IHS Market Services Purchasing Managers’ Index (INPMIS=ECI) fell to a nine-month low of 46.4 in May, down from 54.0 in April, having slipped below the 50-level that marked growth from contraction for the first time in eight. separated. month. Does.
Overall demand declined at the fastest rate since August, with overseas demand declining at the fastest rate since November.
Pollyanna de Lima, economics associate director at IHS Markit, said: “PMI data released at the start of the month shows the manufacturing industry managed to stay its head above water in May, with the services sector struggling as the pandemic rages on. was.”
“The intensity of the COVID-19 crisis and the associated restrictions suppressed domestic and international demand for Indian services.”
Although Asia’s third-largest economy grew at an annualized pace of 1.6% during the first three months of 2021, just ahead of a devastating second wave of COVID-19 hit, economists are pessimistic about this quarter’s growth prospects. read more
Service firms cut their jobs last month, laying off workers at the fastest pace since October, bad news for a labor market that has put millions out of work over the past year.
With business expectations falling to a nine-month low, companies may need to further reduce payrolls within the coming months.
Input costs continued to rise, but firms were able to pass on only some of the increase to customers due to weak demand.
Despite expansion in manufacturing activity, the slowest pace in 10 months, contraction in services activity led the composite index to fall to a nine-month low.