India composite PMI at 60.4, services PMI at 58.9 in October

Posting 58.9 in October, the seasonally adjusted HSBC India Services PMI Business Activity Index was comfortably above both the neutral mark of 50.0 and its long-run average of 54.3.

October data showed softer, although still substantial, expansions in Indian services output and new business. While factors like demand buoyancy and GST relief reportedly led to an improvement in operating conditions, competition and heavy rains constrained growth.

Still, companies were strongly confident of a rise in business activity over the course of the coming 12 months. Meanwhile, monitored firms suggested that the GST reform curbed price pressures. Input costs and output charges rose at the slowest rates in 14 and seven months respectively.

New business intakes rose sharply, albeit to the least extent in five months. International demand for Indian services improved further, as signalled by another increase in external sales.

Amid reports of efforts to support rising intakes of new business, meet delivery deadlines and maintain reliable services, companies recruited additional staff in October.

Indian services companies looked to the future with optimism, forecasting growth of activity in tandem with expectations of demand strength.

The combined output of India's manufacturing and service sectors continued to expand sharply in October, but growth lost momentum. Falling from 61.0 in September to 60.4, the HSBC India Composite PMI Output Index indicated the softest increase since May.

There was also a weaker, albeit still substantial, upturn in aggregate sales. The rate of expansion was the softest in five months. For new orders and output, the slowdowns in growth were centred on the service economy as manufacturers actually registered quicker rates of expansion.

Input costs across India's private sector increased at the weakest rate since August 2024, with softer rises at goods producers and services companies.

Although output charges continued to rise at an above-trend pace, the latest increase was the least marked since June. An unchanged rate of inflation at manufacturers compared with a marginal slowdown at service providers.

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