The Indian services sector growth rate moderated in January as output and sales rose at softer rates, while subdued level of confidence among service providers towards future outlook appeared to have stymied job creation, a monthly survey said on Friday.

The seasonally adjusted S&P Global India Services PMI Business Activity Index fell from 58.5 in December to 57.2 in January.

Despite easing from December, the latest figure remained above its long-run average (53.5) and the upturn was associated with favourable demand conditions and ongoing increase in new work.

For the 18th straight month, the headline figure was above the neutral 50 threshold. In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.

Growth across the service sector lost some momentum at the start of the year, said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.

The survey further said the rise in total new business was centred on the domestic market, as international orders decreased.

On the price front, there were slower increase in both input costs and output charges.

"After re-accelerating in December, input cost inflation in the service economy retreated to a two-year low in January, aiding a slower and only moderate upturn in selling prices," Lima said.

As per the survey, the overall level of positive sentiment fell to a six-month low as the vast majority of panellists (80 per cent) forecast no change in activity from current levels.

"The latest results highlighted some caution among service providers, partly evidenced from the vast majority of firms predicting no change in output from present levels. This somewhat subdued level of confidence towards the outlook appeared to have stymied job creation in January," Lima said.

Meanwhile, the S&P Global India Composite PMI Output Index -- which measures combined services and manufacturing output -- fell from December's near 11-year high of 59.4 to 57.5 in January, but remained above its long-run average (54.1).

New business received by private sector companies expanded in January, as has been the case for a year-and-a-half. However, rates of growth remained historically strong despite slowing from December.

The S&P Global India Services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP. Data collection began in December 2005.

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