India’s private sector growth slows to five-month low in October

Investing.com -- India’s private sector activity continued to expand strongly in October, but the pace of growth slowed to a five-month low, according to the latest HSBC Flash PMI data released Friday.

The HSBC Flash India Composite Output Index fell to 59.9 in October from 61.0 in September, marking its lowest reading since May 2025. Despite the slowdown, the figure still indicated a historically strong rate of expansion.

The services sector drove the deceleration, with the Services PMI Business Activity Index dropping to 58.8 from 60.9 in September. Service providers cited competition, floods, and landslides as factors curbing sales.

In contrast, manufacturing activity strengthened, with the Manufacturing PMI rising to a two-month high of 58.4 from 57.7 in September, signaling substantial improvement in the sector.

New orders for private sector companies continued to grow sharply but at the slowest pace in five months. International demand also remained favorable but expanded at the weakest rate since March, particularly in the manufacturing sector.

Employment growth matched September’s rate, which was the joint-slowest since April 2024. Outstanding business volumes stabilized in October, ending a 45-month sequence of backlog growth across the private sector.

Price trends showed mixed signals, with input costs increasing at the weakest pace since June, which companies attributed to GST relief. However, selling price inflation accelerated from September, with manufacturers registering the stronger rate of increase.

"The HSBC flash manufacturing PMI picked up a tad, likely on the back of GST rate cuts which are buoying domestic demand and curbing cost pressures," said Pranjul Bhandari, Chief India Economist at HSBC.

"However, the drag from US tariff continues to show up in new export orders and future optimism, which remain below the Jan-Jul levels."

Business confidence regarding the year-ahead outlook remained strong but fell from September’s level. Companies expressed some concerns about competitive pressures, market conditions, and demand trends, while hoping to benefit from GST rate cuts, marketing efforts, new product releases, and technology investments.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.