India Composite PMI Rises to 54.6 in August, Services Recover While Manufacturing Slows
Private Sector Activity Shows Marginal Improvement
India's private sector activity expanded at a slightly faster pace in August, with the India Composite PMI rising to 54.6 from 54.3 in July, according to the HSBC Flash India PMI report.
The July reading was a 52-month low. Despite the August improvement, the latest reading remained the second-weakest since March 2022, suggesting that private-sector growth remains subdued.
Services Sector Drives Recovery
The improvement in overall private-sector activity was largely driven by the services sector.
The HSBC Flash India Services PMI Business Activity Index increased to 54.5 in August from 53.3 in July.
Services activity and new business growth both strengthened in August after the sector recorded its weakest increases in 53 months in July.
Manufacturing PMI Falls for Third Straight Month
Manufacturing continued to lose momentum in August. The HSBC Flash India Manufacturing PMI declined to 52.9 from 53.5 in July, marking its third consecutive monthly fall.
The manufacturing output index also weakened to 54.9 from 56.4.
According to the report, manufacturing companies recorded their weakest increases in production and new orders in around five years.
New Orders Show Slight Improvement
Indian companies reported a slightly stronger increase in new orders during August. However, growth remained below the trend seen in recent years.
Challenging market conditions, competitive pressures and subdued customer demand continued to restrict business expansion.
Purchasing Activity Loses Momentum
Manufacturing companies increased their purchasing activity during August, broadly matching higher new-order volumes.
However, the pace of growth in input purchases slowed to its weakest level in more than five years. This also contributed to slower inventory accumulation before and after production.
What Does India Composite PMI Indicate?
The August data shows a clear divergence between India's two major private-sector segments. Services activity regained some momentum after a weak July, while manufacturing growth slowed further.
The India Composite PMI therefore points to a modest improvement in overall private-sector activity, but the relatively weak reading suggests that growth continues to face demand and competitive pressures.
