Private Sector Growth Slips To Three-month Low In June As Demand Softens, Shows PMI
According to the HSBC Flash India composite PMI output survey, the index fell to 57.4 in June from 59.3 in May, signalling a sharp but softer expansion in business activity. A reading above 50 indicates expansion, while a print below 50 signals contraction. However, the June output was the weakest since March this year
New Delhi: With the poor demand growth weighing on both factory and services activities in the country, India’s private sector expanded at its slowest pace in three months in June while business confidence slipped to its lowest level since January, a private survey showed on Tuesday.
According to the HSBC Flash India composite PMI output survey, the index fell to 57.4 in June from 59.3 in May, signalling a sharp but softer expansion in business activity. A reading above 50 indicates expansion, while a print below 50 signals contraction. However, the June output was the weakest since March this year.
Commenting on the survey, Pranjul Bhandari, chief India economist, HSBC said that private sector activity eased a bit in June. “Growth of manufacturing output softened a tad as inventory-building lost steam after a few hectic months,” Bhandari said.
As per the survey, export trends were mixed and services firms reported faster growth in overseas business, but manufacturers saw the weakest increase in new export orders since March 2023. “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,” Bhandari added.
The survey showed that the slowdown in new business also affected hiring. “Hiring by both goods producers and service providers was the weakest since December 2025. Business confidence also weakened. Firms remained optimistic about output over the next 12 months, but the overall level of optimism fell. Among manufacturers, positive sentiment dropped to its lowest level in nearly 4 years,” it said.
In a mixed note, the survey also pointed out that new orders continued to rise strongly, but the pace of expansion slowed to the weakest in three months as some firms struggled to secure fresh work. “Competitive pressures, rising fuel prices and shortages of gas were also cited as constraints,” the survey noted.
