New Delhi: The country's services sector activity increased at the slowest pace in a year in May, as disruptions arising from the elections in the earlier part of the month hampered the growth of new work intakes, a monthly survey showed on Wednesday.
The seasonally adjusted Nikkei India Services Business Activity Index fell to 50.2 in May, from 51.0 in April, pointing to the slowest growth rate in the current 12-month stretch of expansion.
Despite the moderation, the services PMI was in the expansion territory for the 12th straight month. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.
"India's dominant service economy again suffered the impacts of election disruptions, with the growth of both new work and business activity softening for the third straight month," said Pollyanna De Lima, Principal Economist at IHS Markit, and author of the report.
The survey, however, noted that there were signs that the slowdown may prove temporary as companies stepped up hiring and became more confident about future prospects.
"Signs that we may see a revival in the service sector in the near-term were, however, evidenced by a pick-up in hiring activity and improved sentiment. Also supportive of greater client spending and investment among businesses is the evident lack of inflationary pressures," Lima added.