Industry Odisha Bureau, Aug 21: India’s private sector growth bounced back in August following July’s weakest pace. The HSBC Flash India Composite PMI Output Index is expected to rise to fifty-four point six. July’s reading stood at fifty-four point three, marking a fifty-two-month low for expansion. Services sector activity provided the strongest support for the overall private sector recovery. However, manufacturing continued its decline, raising questions about the underlying strength of growth.
The August composite PMI improvement signals a modestly faster expansion compared with July’s historically weak performance. The reading remains the second-weakest expansion recorded since March twenty twenty-two overall. Stronger services activity successfully offset further weakness in manufacturing output during the month. The overall picture suggests that India’s private sector recovery remains uneven across different business segments.
Services providers drove much of the August momentum through stronger output and activity. Employment growth accelerated to its joint-fastest pace since June twenty twenty-five and April. Service sector companies continued clearing accumulated backlogs as demand increased across various industries. Business activity in services benefited from relatively stronger new order flows during the month.
Manufacturing performance deteriorated further, with the Manufacturing PMI dropping to fifty-two point nine. The reading marked the third consecutive monthly decline in manufacturing sector health. Manufacturing output increased at its slowest pace recorded in the past five years. New orders in the manufacturing sector also expanded more slowly than in services.
Manufacturing employment declined for the first time in two and a half years. Companies reduced staffing levels despite receiving new orders, suggesting cautious hiring behaviour overall. The combination of slower output growth and declining workforce pointed to sector-wide pressure. Input purchasing by manufacturers declined to its slowest pace in more than five years.
Export orders rose solidly across the private sector during the mid-fiscal-quarter period reported. Companies reported stronger demand from diverse markets including the United States and Germany. China, Singapore, and Japan also generated notable export orders for Indian private companies. However, the pace of export order expansion eased compared with the previous survey.
Input costs increased in August, driven by rising expenses for electricity and steel. Transport and technology costs also accelerated during the month for Indian companies surveyed. Despite the increase, overall cost pressure remained the softest recorded in seven months. This moderation in input cost inflation provided some relief for manufacturers and service providers.
Selling price inflation moved in the opposite direction, with companies raising prices faster. Both manufacturing and services companies increased selling prices at an accelerated rate in August. The overall selling price uplift represented the strongest recorded since April of this year. Companies cited stronger efforts to pass rising input costs directly onto their customers.
Business expectations for the coming year edged higher modestly from July’s subdued levels. Companies across both manufacturing and services expressed somewhat greater optimism about market conditions. Improved expectations may signal emerging hope that current economic headwinds could gradually ease. However, underlying growth momentum remains constrained by challenging market conditions and competitive pressures.
The HSBC Flash India PMI survey covers approximately four hundred manufacturers and service providers. Survey panels are stratified by sector and company workforce size based on GDP contributions. S&P Global defines services to include consumer, transport, information, communication, finance and insurance services. The data offers an early indication of economic sentiment shifts and private sector momentum.
