India's services sector activity growth slips to 12-month low in May : PMI

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 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.

“India’s dominant service economy again suffered the impacts of election disruptions, with 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.

Meanwhile, the seasonally adjusted Nikkei India Composite PMI Output Index, that maps both the manufacturing and services industry, was at 51.7 in May, unchanged from April.

“Taking the results released today in conjunction with manufacturing sector data published on Monday, PMI figures show that the combined private sector remains in good health,” Lima said.

Lima further added that with a government formed and a resumed policy agenda, a recovery is expected as we head towards the second half of 2019.