India's Manufacturing and Services Sectors Experience Slowest Growth in 2024: HSBC PMI Survey

India's manufacturing and services sectors saw a slowdown in September, with the HSBC Flash India Composite PMI Output Index dropping to 59.3 from 60.7 in August. Both manufacturing and services experienced the slowest growth rates of 2024, although strong overall performance persisted. Inflation rates remained muted, and employment showed solid gains.

India's manufacturing and services sectors reported slower growth in September, as indicated by the HSBC Flash India Composite PMI Output Index, which fell to 59.3 from 60.7 in August. This index measures factory business conditions, including new orders, output, employment, supplier delivery times, and inventory levels, according to the survey released on Monday.

Despite the slowdown, the survey highlighted that overall growth in the private sector remained robust, although at the slowest pace seen in 2024. Employment gains continued to be solid, driven by heightened business confidence. The HSBC 'flash' PMI® survey, compiled by S&P Global, noted ongoing strong growth across the Indian private sector for September, but at the slowest rates this year.

Inflation rates for both input costs and output prices were muted, with service providers raising charges at the slowest pace in over two and a half years. Manufacturing and services sectors showed softer expansions, and business activity was supported by rising new orders, albeit at a slower pace. Pranjul Bhandari, Chief India Economist at HSBC, stated that despite the slower pace, growth remained well above the long-term average, with hiring levels rising faster due to improving business confidence.

The survey also noted effective workload management in September, with a slight rise in backlogs. While job growth in manufacturing slowed, expansion in purchasing activities continued. Input cost inflation remained modest but slightly higher than in August. Output price inflation showed a modest rise, the lowest since February. Despite the slower growth, businesses expressed optimism about the year ahead.

(With inputs from agencies.)