India’s service sector activity contracted sharply in May, survey results from IHS Markit showed on Thursday.

The IHS Markit services Purchasing Managers’ Index fell to 46.4 in May from 54.0 in April.

Economists had forecast a score of 49.0. Any reading below 50.0 indicates contraction in the sector.

New work intakes declined for the first time since September last year and new export business fell at the quickest rate in six months.

The 12-month outlook increased in May and the overall degree of optimism weakened to the lowest since August last year.

The number of workforce decreased in May and outstanding business volume rose further.

Input prices and output charges increased in May. The rate of inflation remained sharp.

The survey showed that the composite output index, which combines services and manufacturing output, fell to 48.1 in May from 55.4 in the prior month.

“The intensification of the COVID-19 crisis and associated restrictions suppressed domestic and international demand for Indian services,” Pollyanna De Lima, economics associate director at IHS Markit, said.

The material has been provided by InstaForex Company – www.instaforex.com

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