BENGALURU, Nov 3 Reuters India39;s dominant services industry expanded at its slowest pace in seven months in October while a slight tapering in demand led to sluggish job creation, but underlying activity remained solid and exports continued to rise healthily, a survey showed on Friday.

Taken together with a cooling in the manufacturing sector last month, the result may still pose a challenge for India39;s economic growth outlook which a recent Reuters poll pegged at 6.3 this fiscal year, the fastest among major countries.

The SP Global India Services Purchasing Managers39; Index fell to 58.4 last month from September39;s 61.0 and lower than the Reuters poll expectation of 60.5.

Still, the reading was above the 50mark separating growth from contraction for a 27th consecutive month.

The Indian service economy continued to register impressive growth, despite the increases in business activity and new work intakes softening from September39;s over 13year highs, said Pollyanna De Lima, economics associate director at SP Global.

Exports was an area of particular strength in October, with new business gains from Asia, Europe and the U.S. boosting growth to its secondhighest in the series over a nineyear history.

While new business a key gauge of demand expanded at the slowest pace in five months, exports accelerated again after easing last month from a record high in August.

The survey noted fierce competition and subdued demand for certain types of services, which…