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Business activity falls to nine-month low in September
India’s private sector business activity, as seen in the Flash Purchasing Managers’ Index (PMI), fell to a nine-month low in September, dragged down by a softening in manufacturing sector output growth.
New Delhi India’s private sector business activity, as seen in the Flash Purchasing Managers’ Index (PMI), fell to a nine-month low in September, dragged down by a softening in manufacturing sector output growth. The HSBC Flash India Composite PMI, which is a seasonally adjusted measure, fell to 59.3 in September from 60.7 in August, according to data released by S&P Global.
Flash PMI values are released a few days ahead of the actual PMI numbers, and include 80%-90% of the responses used in the calculation of the final PMI readings. India became the eighth country to have a Flash PMI indicator in January 2024. The index, compiled by S&P Global from responses to questionnaires sent to survey panels of around 400 manufacturers and 400 service providers, measures output growth in manufacturing and services sectors.
The reading for the composite index in September was the lowest it has been in this calendar year. The Manufacturing Flash PMI also fell to an eight-month low of 56.7 in September from 57.5 in August. The Flash Services PMI business activity also fell to the lowest since November 2023 to 58.9 from a final reading of 60.9 in August.
“The flash composite PMI in India rose at a slightly slower pace in September, marking the slowest growth observed in 2024. Both the manufacturing and service sectors exhibited similar trends during the month. Nevertheless, the pace of growth remained well above the long-term average,” Pranjul Bhandari, chief India economist at HSBC, said in a note issued by S&P Global.
To be sure, the PMI numbers for September remained above the 50-mark, which indicates an expansion over previous month’s activity levels. The reading has been in the expansion zone for over three years now.
In the services sector, employment continued to rise steeply with the September rate being the fastest since August 2022, but the pace of manufacturing jobs growth eased, said the release.
“Growth in new orders moderated by a touch in September, but hiring levels rose at a faster pace, supported by improving business confidence. In fact, the rise in employment in the service sector was the steepest since August 2022, as companies responded to robust growth in new orders. On the price front, input cost inflation rose at a slightly quicker pace in September. Rates of increase in output charges slowed in both sectors, with manufacturers experiencing a larger slowdown, implying a bigger reduction in their margins,” Bhandari said in her note.
The Manufacturing PMI numbers will be released on October 1, and Services PMI on October 4.
