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India’s service sector remains mired in deep downturn during June
Jul-03-2020
India’s service sector remained weak in the month of June, as activity fell at another substantial month-on-month rate amid the ongoing economic disruption caused by the coronavirus disease 2019 (COVID-19) pandemic. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index was at 33.7 in June from 12.6 in May. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - was at 37.8 in June from 14.8 in May.

The report also noted that although the downturn lost further momentum in June, it remained excessively strong as the COVID-19 pandemic curtailed intakes of new work and disrupted business operations. The slower rate of decline was reflective of some stabilisation in activity levels, with around 59% of firms reporting no change in output since May. Meanwhile, only 4% registered growth, while 37% recorded a reduction.
 
On the price front, Indian service providers reported a reduction to their input costs in June. Where a decrease was reported, firms attributed that this general reduction in running costs due to lower activity levels at their units. Although the rate of deflation eased considerably, it was historically marked. Lower expenses were passed through to clients via discounts in June. Selling charges fell modestly and at a similar rate to that seen in May.

 
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