June Services Activity Shrinks At Fastest Rate In 11-Months

Activity in the country's services sector contracted sharply in June as tighter restrictions to contain a resurgence of Covid cases hammered demand.

Activity in the country's services sector contracted sharply in June as tighter restrictions to contain a resurgence of Coronavirus cases hammered demand and forced firms to shed jobs at a rapid clip, a private survey showed on Monday. Asia's third largest economy, which has already recorded more than 400,000 COVID-19 deaths, is still reporting over 40,000 coronavirus cases per day, taking the total number of infections to over 30.5 million. IHS Markit's Services Purchasing Managers' Index plunged to 41.2 last month from an already depressed 46.4 in May. That was its lowest reading since July 2020 and well below the 50-level separating growth from contraction. "Given the current COVID-19 situation in India, it was expected that the service sector would take a hit," said Pollyanna De Lima, economics associate director at IHS Markit.