FPJ News Service mumbai

India’s private sector lost momentum in November, expanding at its weakest pace in six months as manufacturing growth slipped to a nine-month low, according to the HSBC flash Manufacturing PMI released by S&P Global on Friday. A firmer rise in services activity was insufficient to counter the manufacturing slowdown. New orders and business activity increased at their softest rates since May, signalling waning demand.

With little pressure on capacity, recruitment slowed. Input cost inflation eased to its weakest point in nearly five-and-a-half years, and output prices rose at their gentlest pace in eight months. Although firms remained optimistic about the year ahead, overall confidence fell to its lowest level since mid-2022.

“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,” said Pranjul Bhandari, Chief India Economist at HSBC.

The Composite Output Index fell from 60.4 in October to 59.9, remaining well above the 50.0 expansion threshold and its long-run average, yet marking a six-month low. Factory output growth softened to its weakest since May, while services activity edged higher.

The flash Manufacturing PMI slipped from 59.2 to 57.4, the slowest improvement in operating conditions in nine months, though still comfortably above trend. Sales growth at the composite level remained solid but cooled to its softest rate in six months amid challenges securing new business and heavy rainfall in parts of the country.

Export demand grew at a marked, though moderating, pace, dampened by fierce global competition and cheaper offerings abroad. With backlogs shrinking for a second month, job creation slowed to its weakest level in more than eighteen months.

Inflationary pressures continued to cool. Input costs rose only marginally, while output charges increased at the slowest pace since March. Firms expected output to rise over the coming year, backed by competitive pricing, marketing, and recent capacity expansion. Even so, confidence slipped to its lowest since mid-2022.