New Delhi (TIP): Private sector activity in India grew at its weakest rate in over three years in July as demand declined and inflationary pressures increased, according to the HSBC Flash India PMI.
From 57.1 in June to 54.3 in July, the HSBC Flash India Composite PMI Output Index showed the slowest rate of growth in private sector activity since March 2022.
While the HSBC Flash India Manufacturing PMI Output Index increased to 57.0 from 56.3, the HSBC Flash India Services PMI Business Activity Index fell to 53.1 from 57.4. The headline HSBC Flash India Manufacturing PMI, however, decreased from 54.2 in June to 53.9.
Sales and output growth in the private sector have been the worst since early 2022, according to the study. Increasingly difficult market conditions, pressure from competitors, order cancellations, fewer client inquiries, and shortages of essential raw supplies all hindered growth.
At the beginning of the second quarter of FY27, new orders were still increasing, but the rate of growth fell to its lowest point in nearly four and a half years. The services sector, where production and new orders grew at the slowest rate in 53 months, was the focal point of the growth deceleration.
However, export demand increased in both manufacturing and services, and manufacturing picked up some speed again. International sales increased at the highest rate since March at the composite level.
Furthermore, the study indicated an increase in inflationary pressures. As businesses passed on increased prices to consumers, output charge inflation reached its strongest rate since April. Companies reported higher fuel, labor, material, and transportation costs, and input costs increased more quickly than they did in June.
For the eighth consecutive month, employment grew, but at a slow rate, with service providers adding more people than manufacturing.
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