HSBC PMI Highlights India’s Business Growth Decline at 9-Month Low
HSBC PMI Signals Easing Demand in India
The latest HSBC Composite Purchasing Managers Index (PMI) reveals that India's business activity growth slowed significantly, reaching a nine-month low in September. This decline, attributed to easing demand and rising costs, has sparked concerns among economists.
Current Figures and Sector Performance
HSBC's flash India Composite PMI, compiled by S&P Global, decreased to 59.3 this month from 60.7 in August. While still indicating growth, the new data reflects a notable slowdown in business activity, with both manufacturing and services experiencing similar trends.
- Services index fell to 58.9 in September from 60.9 in August.
- Manufacturing index dropped to an eight-month low of 56.7 from 57.5.
Cost Pressures and Employment Trends
Despite overall growth, a softer rise in new business has been noted, impacting the strength of expansion both in domestic and overseas markets. Firms are cautious about passing on rising input costs to customers, leading to muted price changes compared to last month.
Employment trends remain positive, with companies hiring additional staff amid an optimistic business outlook for the next year. The services sector saw its sharpest rise in employment since August 2022.
Outlook for the Reserve Bank of India
These developments may challenge the Reserve Bank of India's monetary policy, as uncertainty over inflation remains a key concern despite August's rate holding below its medium-term target of 4.0%.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.