MUMBAI: Weak demand along with a rise in inflationary pressures pulled the output of the Indian service sector lower during May, macro-economic data showed on Tuesday.
Accordingly, the seasonally adjusted Nikkei India Services Business Activity Index fell from 51.4 to 49.6 in May.
An index reading of above 50 indicates an overall increase in economic activity and below 50 an overall decrease.
According to the report, the decline in service sector's output was indicative of a marginal contraction in business activity, following a two-month period of growth.
"The performance of the service sector was disappointing in May, as output dipped into contraction for the first time in three months," Aashna Dodhia, Economist at IHS Markit, and author of the report was quoted as saying in a statement.
"The slowdown in service activity fed into the labour market, as jobs growth moderated from April's seven-year high."