According to the survey, private sector activity in India slightly increased in August compared to the level below the four-year low, as the recovery in the services sector offset the weakest growth in the industrial sector in the last decade and a half.
HSBC's Flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, reached 54.6 in August, up from 54.3 recorded in July, which was a 52-month low. This figure was higher than the median estimate provided by Reuters, which stood at 54.3.
Although the index remained above the 50 mark, which separates stagnation from growth, it did not reach the recent average of around 60. Growth in new orders, a key indicator of demand, accelerated, but it remained weak compared to the long-term average. Businesses cited difficult market conditions, competitive pressure, and declining customer requirements as factors limiting development.
Nevertheless, the pace of export order growth slowed compared to July. The dominant services sector provided a recovery this month. The overall PMI rose to 54.5 in August, up from 53.3 recorded in July, which represented a 53-month low. Meanwhile, the manufacturing PMI fell for the third consecutive month, reaching 52.9 compared to 53.5, the lowest level since August 2021. Both goods production and new orders grew at the slowest pace in five years.
Furthermore, employment in the manufacturing sector dropped for the first time in two and a half years. However, overall employment accelerated to its fastest pace since June 2025, supported by job growth in the services sector at a 15-month high. Overall raw material cost pressures eased and reached a seven-month low, but companies were raising their selling prices at the fastest rate since April, attempting to pass on increased costs to consumers.
Business optimism for the coming year slightly improved in August, although the degree of this optimism was more modest compared to the beginning of 2026.
