Indian service sector output contracted in September for the seventh successive month amid the coronavirus pandemic, PTI reported on Tuesday. This led to more job losses, though the contraction was lesser than in previous months, according to the IHS Markit India Services Purchasing Managers’ Index.

The seasonally adjusted India Services Business Activity Index rose for the fifth straight month in September to 49.8 from 41.8 in August. However, the service sector contracted because a number above 50 means expansion and a score below that denotes contraction.

“The relaxation of lockdown rules in India helped the service sector move towards a recovery in September,” IHS Markit Economics Associate Director Pollyanna De Lima said. “Participants of the PMI survey signalled broadly stable business activity and a much softer decline in new work intakes.”

Most states across India have relaxed lockdown restrictions, reopening private transport, trains, restaurants, bars, hotels, malls, gyms and sports facilities, among other amenities, over the past few months, based on guidelines from the Centre.

But the service sector saw a decline in employment levels for the seventh straight month in September. “Payroll numbers decreased further, but several firms reported that attempts to take on extra workers were hampered by a lack of available labour,” Lima said. “Backlogs data suggest that hiring efforts will continue in the near term, however, so we could see a better employment trend in coming months provided that people are willing to leave their hometown in search for vacancies.”

But companies are positive about future growth prospects, the survey added. September was the first month since April when firms were positive about possibilities for growth. “In line with hopes that a vaccine for Covid-19 will be rolled out, companies were optimistic about the year-ahead outlook for business activity,” the survey said.

On the other hand, the Composite PMI Output Index, which measures combined services and manufacturing output, rose from 46.0 in August to 54.6 in September, the survey said. This meant there was growth in activity across the private sector in the country.

“Taking into account the performance of the manufacturing industry, a better picture of the Indian economy is painted,” Lima said. “Private sector output expanded for the first time in six months during September, and at an above-trend rate, while the increase in sales was the first since February.”

India’s Gross Domestic Product growth rate for the April-June 2020 quarter was an abysmal (-)23.9%, due to lockdowns necessitated by the coronavirus pandemic.

India’s coronavirus count has risen to 66,85,083 with 61,267 new cases on Tuesday. The toll increased by 884 to 1,03,569. So far, more than 55 lakh people have recovered from the infection.