India's HSBC flash PMI falls to six-month low at 59.9 in Nov from 60.4 in Oct

New Delhi [India], November 21 : The HSBC Flash India Composite Output Index, which tracks the combined performance of the country's manufacturing and services sectors, slipped to 59.9 in November from 60.4 in October, hitting a six-month low, according to data released by S&P Global.

Although HSBC Flash India PMI remained well above the neutral 50.0 mark, which signals a further considerable rise in overall business activity.

This index measures month-on-month changes in the combined output of manufacturing and services sectors.

According to the report, while both new orders and business activity expanded further, the pace eased to its slowest since May.

The subdued demand conditions for some firms and heavy rainfall in parts of the country as factors weighing on growth. International sales also rose at a weaker, though still marked, pace, with companies pointing to intense global competition and cheaper alternatives abroad.

Pranjul Bhandari, Chief India Economist at HSBC, said, "The HSBC flash manufacturing PMI eased, though the improvement in operating conditions remained healthy. The rise in new export orders matched that seen in October. However, overall new orders came in soft, indicating that the GST-led boost may have peaked. Cost pressures eased considerably, and so did prices charged."

Some manufacturers reported subdued intakes of new business in November. Concurrently, the latest rise in services activity was faster than that recorded in the previous month.

Manufacturing growth softened more notably. The HSBC Flash India Manufacturing PMI fell to 57.4 in November from 59.2 in October, signalling the slowest improvement in operating conditions in nine months. Manufacturers reported a weaker rise in output and new orders, even as demand in the services sector improved marginally over the previous month.

Despite the continued expansion, the private sector showed no pressure on operating capacity, with outstanding business volumes falling for the second consecutive month. This, along with softer sales growth, led to a slowdown in job creation. Employment rose for the 42nd month, but at the weakest pace in over a year-and-a-half.

On the price front, inflationary pressures eased significantly. Input cost inflation slowed to its weakest level in nearly five-and-a-half years, while output charge inflation cooled to an eight-month low.

Looking ahead, companies remained optimistic about future output, supported by competitive pricing, marketing efforts and capacity expansions. However, overall business confidence slipped to its lowest point since July 2022, reflecting concerns about softer demand conditions.

"Private sector firms in India forecast output growth in the year ahead, supported by competitive pricing strategies, marketing initiatives and capacity expansion efforts in recent months. That said, the overall level of confidence fell to its lowest since mid-2022 during November," the report added.

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