India’s private sector activity picked up slightly in August, recovering from an over four-year low, as a rebound in services growth offset the weakest expansion in manufacturing in five years.
The HSBC Flash India Composite PMI, compiled by S&P Global, rose to 54.6 in August from July’s 54.3, coming in above a Reuters poll median estimate of 54.3.
The services sector drove the improvement, recording a modest re-acceleration in business activity and new work after registering its weakest growth in 53 months in July.
Manufacturing growth, on the other hand, continued to weaken. The HSBC Flash India Manufacturing PMI fell for a third consecutive month to 52.9, its softest level in five years.
While the composite reading stayed comfortably above the 50-mark separating growth from contraction, it remained well below the recent average of around 60 seen earlier in the year.
The data offers a mixed signal for India’s economy heading into the final months of 2026, with services providing resilience even as factory output growth continues to lose momentum.
The HSBC Flash India Manufacturing PMI fell for a third straight month to 52.9, its weakest reading in five years, even as it stayed above the 50-mark that separates growth from contraction.
Job creation across India’s private sector accelerated to its fastest pace since June 2025, with the services sector leading the pickup in hiring.
Export orders continued to rise at a solid pace in August, with growth reported from markets including the United States, Germany, China, Singapore and Japan.
Input cost inflation eased to its softest level in seven months, giving companies some relief on the pricing front even as overall demand growth remained modest.
Business sentiment for the year ahead improved across both the manufacturing and services sectors compared with July, according to the survey data.
The Reuters poll of economists had pegged the composite PMI at 54.3 for August, meaning the actual reading of 54.6 came in slightly above expectations.
Photo by Gnoeee, Wikimedia Commons, CC BY-SA 4.0
