India Private Sector Activity Hits Four-Month High In October As Business Activity Accelerates: HSBC PMI

New Delhi, Oct 23 (KNN) India's private-sector business activity expanded at its fastest pace in four months in October, supported by stronger new orders, improved services output and easing inflationary pressures, according to the HSBC Flash India Purchasing Managers' Index (PMI) released on Friday.

The HSBC Flash India Composite Output Index, which measures combined activity in the manufacturing and services sectors, rose to 56.7 in October from 55.9 in September. The reading indicated the fastest expansion since June, although growth remained below the average recorded so far in 2026.

A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction. The composite index has remained above the 50-mark for 63 consecutive months.

The services sector strengthened, with the Flash Services Business Activity Index rising to 56.2 from 55.2. In contrast, the manufacturing PMI edged down to 54.9 from 55.1, largely reflecting slower job creation.

New Export Orders Gather Pace

The survey showed that growth in new business accelerated in October, supported by the fastest increase in international orders in six months. Companies reported receiving export orders from markets including the US, the UK, West Asia and Bangladesh.

Manufacturing output growth remained broadly stable, with the output index edging up to 57.6 from 57.5. Manufacturers also increased inventories of purchases and finished goods in response to stronger orders.

HSBC Chief India Economist Pranjul Bhandari said manufacturing activity continued to expand, with output and new orders broadly maintaining the previous month's pace. However, export orders recorded their fastest increase since June 2025.

Hiring Slows, Inflationary Pressures Ease

Employment growth remained marginal and slowed to its weakest pace so far this year. Services firms kept staffing levels unchanged, ending a nine-month period of job creation, while manufacturers reported a slight increase in workforce numbers.

Backlogs of work declined for the third time in four months. The rate of depletion was the joint-fastest in six-and-a-half years, matching the level recorded in August 2021.

Input-cost inflation eased for the seventh consecutive month to its lowest level in almost a year, although companies continued to report higher steel and transportation costs. Selling-price inflation also slowed, with output prices rising at their weakest pace since March 2025. In manufacturing, the increase in selling prices was the softest in almost four years.

Business Confidence Improves

Companies remained optimistic about business activity over the coming year, with confidence rising to its highest level since May. However, the reading remained below the average for 2026 so far.

The flash survey is based on responses from around 400 manufacturers and 400 service providers and provides an early indication of the final monthly PMI readings. The final October PMI data are scheduled for release in early November.

(KNN Bureau)