The pace of activities in the services sector softened for a third straight month and hit a one-year trough in May, as election-related uncertainties had weighed on fresh orders. The seasonally-adjusted Nikkei India Services Business Activity Index, published by IHS Markit, hit 50.2 in May, against 51 in April. A reading above 50 suggests expansion, while below it signals contraction.
Inflows of new business orders at service providers rose at the slowest pace in eight months.
Services sector firms indicated that delayed client payments prevented them from working on their outstanding business. Although backlogs have increased throughout the past three years, the accumulation recorded in May was the weakest, as per the survey. The data comes at a time when GDP growth hit a five-year low of 5.8 per cent in March quarter. —FE