Service sector output at record low in April

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SME Times News Bureau | 06 May, 2020
The outbreak of Covid-19 pandemic and the subsequent national lockdown implemented to curb its spread, has led to a massive declin e in India's service sector output in April, a macro-economic data point sho wed on Wednesday.

Accordingly, the IHS Markit India Services Business Activity Index showed a reading of 5.4 in April, which is an extreme decline from 49.3 in March, and indicative of the most severe contraction in services output since records began in December 2005.

An index reading of above 50 indicates an overall increase in economic act ivity and below 50, an overall decrease.

The survey panellists said the activity fell severely as a result of the n ationwide lockdown, leading businesses to shut down their operations as dema nd collapsed.

"Approximately 97 per cent of survey respondents observed a reduction in o utput, highlighting the widespread impact of the COVID-19 pandemic," the report said.

Similarly, the Composite PMI Output Index, which measures the combined ser vices and manufacturing output, sank to a new record low i April.

"At 7.2, the index fell from 50.6 in March and was indicative of an unprec edented decline in private sector business activity," the report said.

"The latest reading was the smallest by some margin, eclipsing the previos low seen in February 2009."