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India’s private sector activity expanded at its fastest pace in four months in October as new orders picked up and services output improved, according to a private survey released on Friday.
The HSBC Flash India Composite Output Index, which tracks the combined output of the manufacturing and services sectors, rose to 56.7 in October from 55.9 in September.
This marked the fastest pace of growth since June, though it remained below the average for 2026 so far.
The Manufacturing Purchasing Managers’ Index (PMI) slipped to 54.9 from 55.1 as job creation in factories slowed.
The Services PMI Business Activity Index, meanwhile, rose to 56.2 from 55.2.
A reading above 50 indicates expansion, while one below 50 signals contraction.
The composite index has now remained above the 50 mark for 63 consecutive months.
Output growth strengthened in both sectors, with the Manufacturing Output Index edging up to 57.6 from 57.5.
Improving market conditions and higher new order volumes supported the rise, the survey said.
Growth in total new business also quickened, helped by the fastest increase in international orders in six months.
Firms reported stronger demand from the US, the UK, West Asia and Bangladesh.
“Private-sector manufacturing activity continued to expand, with growth of output and new orders broadly unchanged at last month’s levels. However, the steady pace of new order growth masks the fastest increase in new export orders since June 2025,” said Pranjul Bhandari, chief India economist at HSBC.
Hiring, however, lost steam.
According to the survey, employment rose only marginally and at the slowest pace so far this year.
Services firms kept staffing levels unchanged, ending a nine-month run of job creation, while manufacturers added staff only slightly.
Backlogs of work fell for the third time in four months.
“Although modest, the rate of depletion was the joint-strongest in six-and-a-half years, equal with that seen in August 2021. Moreover, the latest fall was among the sharpest since the global financial crisis,” the survey noted.
Input cost inflation eased for the seventh straight month to its lowest level in almost a year.
“Weaker rises were seen across both the manufacturing and services sectors. Where input prices increased, higher steel and transportation costs were mentioned,” the survey said.
Selling price inflation also eased to its slowest pace since March 2025, with weaker increases across both sectors.
Factory-gate charges rose at the softest pace in almost four years.
“Manufacturers responded by increasing their stocks of purchases and finished goods. Input cost inflation eased, while the rise in selling prices softened to its weakest in almost four years,” Bhandari added.
The flash PMI provides an early indication of the final manufacturing, services and composite PMI readings and is based on around 90 per cent of monthly survey responses.
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