Media365
India’s private sector activity expanded at its slowest pace in more than four years in July, as weaker demand, challenging market conditions and a sharp moderation in the services sector weighed on overall business growth, according to the latest HSBC Flash PMI survey.
The HSBC Flash India Composite Output Index, which tracks activity across the manufacturing and services sectors, declined to 54.3 in July from 57.1 in June, marking the weakest pace of expansion since March 2022. While the index remained above the 50-mark, indicating continued growth, the slowdown points to softer momentum in the economy at the start of the second quarter of FY27.
According to the survey, private sector output and new business expanded at their slowest pace since early 2022 amid rising competitive pressures, order cancellations, fewer client enquiries and shortages of key raw materials.
The moderation was led primarily by the services sector, where business activity slowed to its weakest level in 53 months, offsetting signs of resilience in manufacturing.
Despite the softer domestic demand environment, overseas demand remained robust. The survey showed that new export orders continued to rise strongly, with manufacturers outperforming service providers. At the composite level, international sales recorded their fastest expansion since March.
The report also highlighted that firms continued to add jobs in July, reflecting confidence in future demand. At the same time, both input costs and selling prices increased at a faster pace during the month.
The manufacturing sector showed mixed trends. Companies stepped up purchasing activity, supplier delivery performance improved and inventories of both inputs and finished goods increased after declining in June.
However, the HSBC Flash India Manufacturing PMI edged down slightly to 53.9 in July from 54.2 in June, suggesting factory operating conditions continued to improve, albeit at a below-trend pace.
Overall, the survey indicated that while India’s manufacturing sector continued to benefit from healthy export demand and stable production, slower services activity and softer domestic demand dragged overall private sector growth to its weakest level in more than four years.
