The purchasing managers' index (PMI) is an indicator based on company surveys that can be used to gain economic insight into a sector. The Manufacturing PMI and the Services PMI are the two most common PMI surveys.
The IHS Markit India Services PMI is based on data gathered from questionnaires addressed to purchasing executives at around 350 private service companies in India. Sales, employment, inventories, and pricing are all tracked by the index.
According to June statistics, services firms lost new business as a result of the pandemic's debut and the return of containment measures, which limited demand.
The seasonally adjusted India Services Business Activity Index fell to 41.2 in June, indicating a further drop in output. Furthermore, the current measurement indicated the quickest rate of decline since July 2020, down from 46.4 in May. The deepening of the COVID-19 situation, as well as stringent regulations, have stifled demand for services, according to companies monitored.
Due to weak demand circumstances, services firms obtained less new business for the second month in a row. The contraction was fast and furious, the fastest since July 2020.
In June, service companies continued to pass on increased costs to their customers by raising their selling prices.
Four of the five broad areas of the service economy saw a fall in business activity and new orders, with Consumer Services experiencing the sharpest pace of contraction. The only component that grew was transportation and storage.
In June, international demand for Indian services worsened even more, with new export orders declining for the sixteenth month in a row. Despite a slowdown since May, the rate of shrinkage remains rapid.
Downturn in private sector output quickens in June
In June, private sector enterprises in India reported a second consecutive monthly drop in commercial activity as market circumstances remained severe due to the pandemic's escalation. Furthermore, the Composite* PMI Output Index fell from 48.1 in May to 43.1 in June, signalling the fastest rate of decline since July 2020. Factory output fell for the first time in 11 months, while service activity shrank more quickly.
In the private sector, the rate of input cost inflation was largely identical to May, with little change in both the manufacturing and service economies.
In India, prices for goods and services rose little in June, with the overall rate of inflation remaining at a three-month low and well below its long-run average.