India Private Sector Activity Hits 3-Month High In September As Manufacturing And Services Gain Momentum

India’s private sector recorded stronger business activity in September, reaching a three-month high as both manufacturing and services sectors reported improved output and demand, according to HSBC’s flash Purchasing Managers’ Index (PMI) survey.

Compiled by S&P Global, the headline PMI rose to 56.5 in September from 54.3 in August, which was a four-year low. The index remained above the 50-point threshold indicating expansion for the 62nd consecutive month.

Manufacturing and services sectors see stronger demand

The survey showed that new business growth accelerated during the month, with manufacturers reporting a sharper increase compared with service providers.

“Sales growth remained above that recorded by services companies and hit a seven-month high,” the survey said.

Service companies benefited from higher demand for property, transport, travel, software and digital services, supported by increased marketing efforts. Manufacturers reported improved orders for products including aluminium, electronics, food items, pharmaceuticals and new product launches.

The HSBC Flash India Manufacturing PMI increased to 55.7 in September from 52.8 in August, while the Services PMI rose to 55.8 from 54.1.

“Activity in the private sector gained momentum, led by stronger manufacturing. Output and new domestic orders rose at faster rates. Renewed tensions in the Middle East have once again led firms to build buffers to manage the uncertainties,” said Pranjul Bhandari, chief India economist at HSBC.

Hiring improves, cost pressures ease

Employment conditions strengthened during September as companies expanded hiring in response to higher output and order growth. Job creation was recorded across both manufacturing and services sectors.

Meanwhile, input cost inflation moderated to its lowest level since January, although manufacturers faced higher expenses due to increased costs of electrical components, food items, fuel, metals, pharmaceutical ingredients and technology resources.

Selling price inflation remained largely stable, with factory-gate prices rising faster while service providers reported a slower increase in charges.

S&P Global said the flash PMI offers an early view of monthly economic activity and is based on around 90% of survey responses. Final manufacturing PMI data will be released on October 1, followed by services PMI data on October 6.