India's business activity accelerated in September, reaching a three-month high driven by robust demand in both manufacturing and services. However, slower export growth and subdued hiring tempered the overall economic picture.
The acceleration in India's business activity suggests resilience in the domestic economy, driven by strong consumer and business demand, which could support continued economic growth. However, the slowdown in export momentum and hiring indicates potential headwinds that could impact the pace of future expansion.
India's business activity saw a significant acceleration in September, reaching a three-month high as demand strengthened in both the manufacturing and services sectors, according to a preliminary survey. The HSBC flash India Composite Purchasing Managers' Index (PMI) increased to 56.5 from 54.3 in August, surpassing the Reuters poll median forecast of 54.4 and indicating expansion above the 50-point threshold.
Despite the rebound, the composite index averaged 55.1 for the third quarter, a decrease from 58.2 in the second quarter, suggesting a broader slowdown in Asia's third-largest economy compared to the previous quarter's 7.8% expansion. The manufacturing PMI climbed to 55.7, its highest in seven months, driven by faster growth in output and new orders, with goods producers resuming hiring. The services index also rose to 55.8. However, export growth was tempered by the slowest increase in new exports in 33 months, and hiring momentum in the services sector also eased. Input cost inflation eased to its lowest since January, providing some relief to businesses, though selling price inflation remained steady, offering little respite to consumers.
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