New Delhi [India], July 24 : India's private sector growth slowed further in July, recording the weakest pace of expansion since March 2022, as challenging market conditions, competitive pressures and weaker demand weighed on business activity, according to the HSBC Flash PMI data report.
The report said the HSBC Flash India PMI Composite Output Index fell to 54.3 in July from 57.1 in June, signalling the slowest pace of expansion in private sector activity since March 2022.
HSBC Flash India PMI Composite Output Index is a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and services sectors
It stated, "The HSBC Flash PMI® data for July showed the weakest expansions in private sector sales and output since early2022".
However, the report also shared that the new export orders continued to grow at a stronger pace, firms kept hiring additional workers, and both input costs and output charges increased at a faster rate.
The report noted that growth was held back by increasingly challenging market conditions, competitive pressures, order cancellations, reduced client enquiries and shortages of key raw materials.
Although new orders continued to rise at the beginning of the second fiscal quarter, the pace of expansion eased to the weakest level in close to four-and-a-half years and remained moderate by historical standards.
The moderation in both output and new order growth was largely driven by the services sector, where the pace of expansion retreated significantly from June to the weakest level in 53 months.
In contrast, the manufacturing sector regained some of the momentum it had lost in previous months. The report said both manufacturing and services firms recorded stronger export growth during July, with goods producers outperforming service providers.
The seasonally adjusted index for manufacturing exports rose by nearly four points, while at the composite level, international sales increased at the fastest pace since March.
Manufacturing-specific data also showed improvement in several areas. Companies increased their purchasing activity, while a further improvement in vendor performance supported faster growth in input inventories. After declining in June, stocks of finished goods also increased during July.
Despite these improvements, the HSBC Flash India Manufacturing PMI edged down to 53.9 in July from 54.2 in June, indicating a below-trend improvement in overall factory conditions, the report said.
Overall, the report highlighted that while India's manufacturing sector showed signs of resilience and export demand strengthened, slower growth in the services sector and softer domestic demand resulted in the weakest expansion in the country's private sector activity.