India’s Pvt Sector Growth Eases: Composite PMI Drops To 58.1 In May
The survey showed that manufacturing showed signs of strain in May, with factory output rising at a slower pace — marking the second-weakest expansion since mid-2022, after March’s reading of 55.7
New Delhi: Driven by the Middle East war and muted international demand, India’s private sector growth eased in May as the slowing export orders weighed on manufacturing activity. The manufacturing activities fell to 54.3 in May from 55.9 in the previous month, while services remained relatively resilient at 58.9, higher than 58.8 in April, though it stayed below the stronger readings seen in 2025, a private survey showed on Thursday.
As per the survey, the HSBC flash composite purchasing managers’ index or PMI, compiled by S&P Global, dipped to 58.1 this month from April’s final reading of 58.2, but it remained in the expansion territory. A reading above 50 indicates expansion in activity, while below 50 signals contraction.
The survey showed that manufacturing showed signs of strain in May, with factory output rising at a slower pace — marking the second-weakest expansion since mid-2022, after March’s reading of 55.7. “The manufacturing PMI is forecast to ease to 56.6 from 56.9 in April, signalling a loss of momentum in factory activity. However, services continued to hold up. The flash services business activity index is projected to edge up to 58.9 from 58.8, reflecting steady demand and resilient business confidence,” the survey said.
Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC said that manufacturing activity eased marginally as the rates of expansion in output and new orders moderated, while growth of new export orders softened markedly. “Yet, the manufacturing PMI remained broadly in line with its long-run average, supported by continued inventory building,” Bhandari said, adding that finished goods stocks rose for a second consecutive month and stocks of purchases increased at the fastest rate in three months.
The survey further said that meanwhile, cost pressures accelerated. “The composite input price inflation index rose to its second-highest level in nearly three years, driven largely by manufacturing, where input costs rose at the fastest pace since July 2022. Firms reported higher prices for energy, fuel, gas, metals, plastics, rubber and transport,” it said.
The survey also said that companies attempted to pass on rising costs, but with greater caution. “Output price inflation eased to its weakest pace since January, widening the gap between input costs and selling prices. Despite the cost pressure, business sentiment remained firmly positive, and stayed above its long-run average, though it slipped to a three-month low,” it said.
