Business Activity in India Rises Strongly in September

Last update: Sep 23, 2024 | 11:04 AM IST

The headline HSBC Flash India Composite Output Index, a seasonally adjusted measure measuring the monthly change in aggregate output from India’s manufacturing and services sectors, fell to 59.3 in September from 60.7 in August.

The index pointed to another rapid monthly increase in business activity, although it was the least pronounced so far in 2024. Milder expansions were seen in both manufacturing and services.

The latest HSBC Flash PMI survey, compiled by S&P Global, shows continued strong growth in the Indian private sector in September, although both output and new orders rose at their slowest pace in 2024.

Meanwhile, employment continued to grow robustly amid improved business confidence. The rate of both input and output price inflation was relatively low, and service providers raised their fees at the slowest pace in just over two and a half years.

The HSBC Flash India Manufacturing PMI, a single-digit snapshot of the health of the manufacturing sector calculated based on data on new orders, production, employment, supplier lead times and purchased product inventories, was 56.7 in September, down from 57.5 in August.

The reading indicated a further marked improvement in operating conditions for goods producers, but the pace of improvement was the weakest since January.

Firms were helped to meet demand by continued solid hiring activity, with job creation accelerating from August and remaining above the series average.

The pace of input price inflation in the Indian private sector remained relatively muted in September, despite a slight increase compared to August. The pace of output price inflation remained similarly muted in the latest survey period, coming in just below the series average.

Despite slower growth in production and new orders in September, companies in India remained very optimistic that business activity would pick up in the coming year.

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First published: Sep 23, 2024 | 10:48 AM IST