India's Private Sector Growth Slows To Three-Month Low In June: HSBC Flash PMI

New Delhi, Jun 23 (KNN) Growth in India's private sector activity moderated in June as softer demand conditions weighed on output, new business generation and hiring, according to the latest HSBC Flash PMI survey.
 
The HSBC Flash India PMI Composite Output Index, which measures activity across manufacturing and services, eased to 57.4 in June from 59.3 in May. Although the reading remained comfortably above the 50 threshold indicating expansion, it marked the slowest pace of growth since March. 
 
The moderation was evident across both sectors, with manufacturing and services activity slipping to two-month and 17-month lows, respectively, amid softer demand and persistent cost pressures.
 
New Orders Growth Slows and Mixed Trends in Export Demands 
 
Overall new orders continued to rise in June, but growth slowed to a three-month low as businesses faced intense competition, higher fuel costs and gas supply shortages. 
 
Export demand was mixed, with services recording stronger overseas growth while manufacturing export orders expanded at their weakest pace since March 2023, pushing overall international sales growth to a 21-month low. 
 
The softer demand also weighed on hiring, with employment growth easing to its weakest level in the current six-month expansion and the slowest pace since December 2025 across both sectors.
 
HSBC Sees Manufacturing Resilience
 
Commenting on the findings, Pranjul Bhandari, Chief India Economist, HSBC, said private sector activity had eased modestly during the month.
 
"Growth of manufacturing output softened a tad as inventory-building lost steam after a few hectic months. New export orders remained resilient and the order-to-inventory ratio ticked up, pointing at resilient manufacturing activity down the line. Input costs across the private sector rose, but at the slowest pace in five months," she said.
 
Cost Pressures Ease Further
 
The survey showed outstanding business volumes remained broadly stable, indicating that existing staffing levels were sufficient to handle current workloads. 
 
While firms continued to face higher costs for chemicals, food products, fuel, gas, metals and utilities, input cost inflation eased for the third straight month to its lowest level since January. 
 
Manufacturers faced stronger cost pressures than service providers, but output price inflation softened across both sectors as competitive pressures and subdued demand limited firms' ability to pass on higher costs. Overall, the rise in prices charged by private sector firms was the weakest in six months.
 
Business Confidence Falls to Multi-Month Lows
 
Business confidence weakened in June, with year-ahead optimism falling to its lowest level since January and remaining below the long-run average. 
 
Manufacturers turned more cautious, with sentiment slipping to a nearly four-year low, resulting in the slowest increase in input purchases in two-and-a-half years and softer inventory accumulation. Separately, the HSBC Flash India Manufacturing PMI eased to 54.5 from 55.0 in May, a three-month low that still indicated expansion. 
 
Overall, the survey suggests that while private sector activity remains resilient, softer demand, weaker optimism and cautious hiring point to moderating economic momentum at the start of Q2 FY27.
 
(KNN Bureau)