India: Private-sector PMI crashes into contractionary territory in May
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit fell to 48.1 in May from 55.4 in April. As a result, the PMI moved below the 50-threshold, indicating a decrease in business activity from the previous month.
The services PMI fell from 54.0 in April to 46.4 in May, as the surge in domestic Covid-19 cases and ensuing restrictions caused both new orders and output to decline. On the manufacturing side, the PMI fell from 55.5 in April to 50.8 in May amid slower rises in output and new orders, and faster job shedding.
Commenting on the latest PMI data, Pollyanna De Lima, economics associate director at IHS Markit, said:
“While PMI data released at the start of the month showed that the manufacturing industry managed to keep its head above water in May, the service sector struggled as the pandemic escalated. The intensification of the Covid-19 crisis and associated restrictions suppressed domestic and international demand for Indian services.”