April service sector output slides to record low, shows PMI

The outbreak of COVID-19 pandemic and the subsequent national lockdown implemented to curb its spread, has led to a massive decline in India's service sector output in April, a macro-economic data point showed 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 activity and below 50, an overall decrease.

The survey panelists said the activity fell severely as a result of the nationwide lockdown, leading businesses to shut down their operations as demand collapsed.

"Approximately 97% of survey respondents observed a reduction in output, highlighting the widespread impact of the COVID-19 pandemic," the report said.

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

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

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