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India’s service sector remains sluggish at 34.2 in July
Aug-05-2020
India’s service sector remained sluggish in the month of July, with substantial reductions in both activity and inflows of new work were recorded, as ongoing lockdown restrictions stifled demand and forced companies to cease operations. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index was at 34.2 in July from 33.7 in June. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - was at 37.2 in July from 37.8 in June.

The report also noted that total new business declined for a fifth successive month, with the rate of contraction little changed from June and remaining severe. Besides, service providers made further job cuts in the month of July, on the back of severely muted demand conditions. With capacity being restricted further, firms struggled to process backlogs in July. The level of outstanding business rose again, with the rate of expansion the quickest since October 2017.

On the price front, input costs increased for the first time since March, amid greater fuel and cargo costs alongside higher fees charged by suppliers, while average charges levied by Indian services firms fell for the fourth consecutive month, with the rate of deflation accelerating to a solid pace. Further, the 12-month outlook for activity remained pessimistic for a third successive month.

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