Covid-19 impact: Services PMI rises but fails to break out of contraction

Downturn grips sector as job loss, low export orders and poor domestic demand distress companies

Services sector activity contracted for the fifth straight month in July as restrictions to contain the Covid-19 pandemic destroyed demand in both the domestic and foreign markets, showed a monthly survey released on Wednesday.

The IHS Markit Services Business Activity Index (Services PMI) registered an increase in July, but remained contractionary at 34.2, against 33.7 in June.

In PMI parlance, the 50 mark threshold separates expansion from contraction. While Services PMI had been on a steady rise over the past three months, the pace has slackened recently. It was 12.6 in May and just 5.4 in April.

“The latest reading was among the