The HSBC Flash India PMI data revealed a slowdown in output growth in both manufacturing and services sectors in India during March. The PMI Composite Output Index for the combined output of these sectors stood at 56.5, reflecting softer domestic demand impacting new orders despite a surge in new export orders.
Cost pressures intensified, with companies absorbing some of the increase by squeezing margins, according to Pranjul Bhandari, Chief India Economist at HSBC. Factors such as the Middle East tensions, market instability, and inflationary pressures contributed to the dampened growth.
While new orders placed with manufacturing companies and services counterparts saw softer increases, sales collectively rose at the slowest pace since November 2022. The data also indicated a marginal rise in outstanding business volumes at the composite level for the fourth consecutive month in March.
Manufacturing-specific data showed increased buying levels and stocks of purchases at the end of the last fiscal quarter, although the rates of expansion eased compared to February. Companies reported improved vendor performance in terms of delivery times, with a notable rise in selling prices that outpaced input costs.
Indian private sector firms expressed optimism about increasing output levels in the next 12 months. They cited efficiency enhancements, marketing campaigns, and new client enquiries as reasons for their positive outlook.
