India’s October Flash PMI shows mixed signals as manufacturing growth strengthens while services slow, reflecting moderation in private sector momentum.

India’s private sector growth moderated in October, according to the latest HSBC Flash India PMI, as manufacturing activity expanded while the services sector showed signs of slowing.

The HSBC Flash India Composite Output Index, which tracks both manufacturing and services, fell from 61.0 in September to 59.9 in October, marking the softest increase in output since May 2025. While the index still signals strong expansion, slower growth in new orders—especially in services—tempered the overall momentum. International sales growth eased, and job creation was reported at the joint-softest pace in 18 months.

Manufacturing Sector Strengthens

The HSBC Flash India Manufacturing PMI improved, rising from 57.7 in September to 58.4 in October, reaching a two-month high. The growth was driven by increased domestic demand and new orders in the goods-producing sector. Manufacturers benefited from GST rate cuts, which reduced input cost pressures and enhanced operational efficiency.

Bhandari Pranjul, Chief India Economist at HSBC, noted: “The flash manufacturing PMI picked up, likely due to GST rate cuts boosting domestic demand and curbing cost pressures. New orders and output are above Jan–Jul averages, though US tariffs continue to impact export orders and business optimism.”

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Services Sector Slows

The services sector recorded softer growth due to competition, floods, and landslides affecting sales. International demand, while positive, rose at the slowest pace since March. Outstanding business volumes stabilized, ending a 45-month streak of backlog growth in the private sector, with slight declines in services offsetting manufacturing gains.

Employment and Prices

Private sector employment grew moderately, matching September’s pace and marking the joint-slowest increase since April 2024. Input prices rose at the slowest pace since June, while selling charges increased slightly as businesses adjusted for operational costs, premium inputs, and labor and transportation expenses.

Outlook

Despite a slowdown, companies remain cautiously optimistic about growth in the year ahead, hoping to benefit from GST rate cuts, new product launches, marketing efforts, and technology investments.

The HSBC Flash PMI survey covers roughly 400 manufacturers and 400 service providers, representing 80–90% of total responses. Services tracked include consumer, transport, information, communication, finance, insurance, real estate, and business services.