India’s private-sector activity picked up in September, with a preliminary PMI survey showing a stronger pace of expansion in both manufacturing and services, though the rebound was partly offset by weaker export momentum and more restrained hiring.
Flash PMI readings from HSBC placed the composite Purchasing Managers' Index (PMI) at 56.5 in September, up from 54.3 in August and reaching its highest level since June. The September reading moved the composite index back above its long-run average and exceeded the Reuters poll median forecast of 54.4. Readings above 50 indicate expansion.
Despite the month-on-month improvement, the preliminary figure did not reverse a broader easing in growth across the quarter. Based on September’s preliminary reading, the composite PMI averaged 55.1 for the quarter, below the 58.2 average recorded in April-June. That suggests a softer growth profile for the quarter compared with the prior period, which followed a forecast-beating 7.8% expansion in GDP last quarter.
Manufacturing and services dynamics diverged somewhat within the rebound. The manufacturing PMI climbed to 55.7 from 52.8, marking its strongest reading in seven months as both output and new orders rose at a faster clip. Goods producers also resumed hiring after a marginal reduction in August.
The services PMI increased to 55.8 from 54.1, signaling continued expansion in that segment. However, services lost hiring momentum in September, reducing the labour-side contribution to growth in that sector.
External demand and prices posed mixed influences. New export orders rose at the slowest pace in 33 months, which weighed on overall export growth despite a modest uptick in manufacturing exports. On costs, overall input-cost inflation eased to its weakest level since January, largely driven by services. Selling-price inflation, however, was broadly unchanged, implying that consumers saw little relief from elevated prices.
Business sentiment registered an improvement, with confidence about the year ahead reaching a four-month high.
This report is based on the preliminary HSBC flash PMI for September and the quarter-to-date composite averages derived from that reading.