India’s private sector activity expanded at its fastest pace in four months in October as firms secured greater volumes of new orders and price pressures cooled further, according to a private survey released on Friday.
The HSBC Flash India Composite Output Index, which tracks the combined output of the manufacturing and services sectors, surged to 56.7 in October from 55.9 in September.
This was the fastest rate of growth since June, though still below the average for 2026 so far, according to the survey.
The Manufacturing Purchasing Managers’ Index (PMI) slipped to 54.9 from 55.1 as job creation in factories slowed.
The Services PMI Business Activity Index rose to 56.2 from 55.2. A reading above 50 indicates expansion, while one below 50 signals contraction. The composite index has now stayed above the 50 mark for the 63rd straight month.
Output growth strengthened in both sectors, with the Manufacturing Output Index edging up to 57.6 from 57.5.
Improving market conditions and higher new order volumes supported the rise, the survey said.
Growth in total new business also quickened. It was helped by the fastest rise in new business from abroad in six months, with firms reporting demand from the US, the UK, West Asia and Bangladesh.
“Private sector manufacturing activity continued to expand, with growth of output and new orders broadly unchanged at last month’s levels. However, the steady pace of new order growth masks the fastest increase in new export orders since June 2025,” said Pranjul Bhandari, chief India economist at HSBC.
Hiring, however, lost steam. According to the survey, employment rose only marginally and at the slowest pace so far this year.
Services firms kept staffing levels unchanged, ending a nine-month run of job creation, while manufacturers added staff only slightly.
“Anecdotal evidence often suggested that companies were reluctant to hire additional staff as employment levels were sufficient to deal with current workloads,” the survey suggested.
Backlogs of work fell for the third time in the last four months with the latest fall being among the sharpest since the global financial crisis.
Input cost inflation eased for the seventh straight month to its lowest in almost a year.
“Weaker rises were seen across both the manufacturing and services sectors. Where input prices increased, higher steel and transportation costs were mentioned,” it added.
Selling price inflation also eased to its slowest since March 2025, with weaker rises across both sectors. Manufacturing selling prices rose at the softest pace in almost four years.
“Looking to the future, companies in India remained optimistic that business activity will increase over the coming year amid expectations that market conditions will continue to strengthen,” the survey stated.
The flash PMI is an early indication of the final manufacturing, services and composite PMI readings and is based on around 90 per cent of monthly survey responses.
The final PMI data for manufacturing will be released on November 2 and services on November 4.
Source: Business Standard
