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Business activity in India maintained its momentum in September, with the country's Purchasing Managers' Index hitting 59.3, marginally down from 60.7 in August.
According to the India HSBC PMI report, compiled by S&P Global, any PMI reading above 50.0 signals an expansion of business activities, while below 50.0 indicates contraction.
"The flash composite PMI in India rose at a slightly slower pace in September, marking the slowest growth observed in 2024. Both the manufacturing and service sectors exhibited similar trends during the month. Nevertheless, the pace of growth remained well above the long-term average," said Pranjul Bhandari, Chief India Economist at HSBC.
Employment Rises in September
According to the report, employment continued to rise solidly amid improved business confidence among companies in September.
S&P Global added that rates of both input cost and output price inflation were relatively muted, with service providers raising their charges at the slowest pace in just over two-and-a-half years.
"Growth in new orders moderated by a touch in September, but hiring levels rose at a faster pace, supported by improving business confidence. In fact, the rise in employment in the service sector was the steepest since August 2022, as companies responded to robust growth in new orders," said Bhandari.
She added: "On the price front, input cost inflation rose at a slightly quicker pace in September. Rates of increase in output charges slowed in both sectors, with manufacturers experiencing a larger slowdown, implying a bigger reduction in their margins."
Companies Positive About Future Outlook
According to the S&P Global survey, companies in India showed strong optimism that business activity will increase over the coming year, despite softer expansions in output in September.
Moreover, confidence strengthened from August and was above the average since the series began in 2012. Firms generally expect to be able to secure new business over the next 12 months, thereby supporting output growth.
