India’s Private Sector Growth Slows to Five-Month Low in October
India’s private sector growth eased in October, reaching a five-month low, as softer demand and rising output prices weighed on business confidence, according to HSBC’s flash India Composite Purchasing Managers’ Index (PMI) released Friday. The index fell to 59.9 from 61.0 in September, below a Reuters poll forecast of 61.2. Despite the decline, growth remained robust and well above the 50-point mark that separates expansion from contraction.
The slowdown was largely driven by weaker services growth, with the services business activity index slipping to 58.8 from 60.9, while manufacturing activity showed a modest recovery, rising to 58.4 from 57.7. New orders expanded at their slowest pace since May, reflecting reduced momentum in services, even as goods producers experienced a slightly faster rise in demand. International demand also softened, with manufacturing exports seeing their weakest growth in seven months amid steep tariffs on Indian exports to the United States.
Cost pressures eased across both sectors following the reduction in goods and services tax (GST) in September, but firms largely absorbed the benefit, raising selling prices to offset operational costs. Looking ahead, business optimism weakened as companies expressed concerns over rising competitive pressures, uncertain market conditions, and slowing demand trends for the year ahead.
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