The HSBC Flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, retreated to 59.9 this month, down from October’s final reading of 60.4. Although the index remains comfortably above the 50-mark separating growth from contraction, the third consecutive monthly decline suggests the Indian economy is losing some momentum.
The Flash India Manufacturing PMI slumped to a nine-month low of 57.4 in November from 59.2 last month. Factory production growth recorded its weakest reading since May, with firms noting subdued intakes of new business. Survey participants attributed the slowdown partly to “heavy rain” across some regions of the country and challenges in securing orders due to competitive pricing from rivals in global markets. Pranjul Bhandari, chief India economist at HSBC, suggested that “Overall new orders came in soft, indicating that the GST (goods and services tax)-led boost may have peaked.”
The country’s services industry, however, acted as a crucial buffer, with activity accelerating to 59.5 from 58.9 in October. Despite this, the overall private sector faced headwinds in international markets. New export orders across the private sector rose at the slowest pace since March, suggesting that the 50% punitive US tariffs on imports from India are affecting international demand.
The weakening pace of activity also dampened future expectations. Optimism around year-ahead output slipped to its lowest level since July 2022. This subdued outlook affected the pace of job creation, which slowed to a low of over a year and a half.
