Falling to 12-month low, India’s services sector growth eased further in the month of May, as disruptions arising from the elections in the earlier part of the month hampered growth of new work intakes. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index eased to 50.2 in May from 51 in April. However, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services – was at 51.7 in May, unchanged from April.
The report found that new business inflows at service providers increased at the slowest pace in eight months. It further noted that output rose in tandem with ongoing sales growth, but competitive pressures and the elections curbed the upturn. Meanwhile, services companies retained positive projections about the 12-month outlook for business activity.
Besides, a marginal and softer rise in services fees was registered during the month of May, with charge inflation much weaker than its long-run average. Services companies indicated that delayed client payments prevented them from working on their outstanding business. Backlogs have increased throughout the past three years, though the accumulation recorded in May was the weakest since January.
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