India's private sector activity showed a modest recovery in August, with the HSBC flash Composite Purchasing Managers' Index (PMI) rising to 54.6 from July's 54.3, according to data compiled by S&P Global. The figure exceeded the Reuters poll median estimate of 54.3 and remained above the 50-mark that separates growth from contraction, though it stayed below the recent average of around 60.
The services sector drove the rebound, with the headline PMI climbing to 54.5 in August from a 53-month low of 53.3 in July. Services-sector hiring accelerated to its fastest pace in 15 months, offsetting weakness in manufacturing. The manufacturing PMI, however, declined for a third consecutive month, falling to 52.9 from 53.5 in July. This marked the lowest level since August 2021, with both goods output and new orders expanding at their weakest pace in five years.
Employment across the private sector grew at its joint-fastest rate since June 2025, supported by robust hiring in services. New orders increased at a faster pace than in July but remained subdued relative to historical averages, as firms cited competitive pressures, challenging market conditions, and softer customer demand. Export orders growth slowed compared to the previous month.
Input cost pressures eased to a seven-month low, though companies raised selling prices at the fastest pace since April to offset higher expenses. Business confidence for the year ahead improved slightly but remained below levels observed in early 2026.
