India's economic landscape displayed mixed signals in October as the services sector witnessed a moderation in growth momentum while manufacturing activity showed signs of revival, according to the latest HSBC Purchasing Managers' Index (PMI) data.
Services Sector Expansion Cools
The HSBC India Services PMI Business Activity Index registered a decline from September's figures, indicating a slowdown in the pace of expansion across the services industry. This moderation comes despite the sector maintaining its growth trajectory for the twenty-eighth consecutive month.
Key factors contributing to this deceleration include:
- Slower growth in new business inflows
- Persistent cost pressures affecting operational efficiency
- Competitive market conditions impacting pricing power
Manufacturing Shows Resilience
In a contrasting development, India's manufacturing sector demonstrated renewed strength with factory activity rebounding significantly. The manufacturing PMI climbed to its highest level in several months, signaling improved business conditions and output growth.
The manufacturing revival was driven by:
- Stronger domestic and international demand
- Increased production volumes
- Improved supplier delivery times
- Enhanced business confidence
Employment Trends Remain Stable
Despite the mixed performance across sectors, employment levels remained largely stable. Services companies maintained cautious hiring approaches while manufacturing firms showed modest job creation, reflecting the overall business sentiment.
Inflation Outlook
Input costs continued to rise across both sectors, though the rate of inflation showed some moderation. Service providers reported higher operating expenses, primarily driven by rising labor costs and transportation charges, while manufacturers faced increased raw material prices.
"The latest PMI readings highlight the evolving dynamics of India's economic recovery," noted economists analyzing the data. "While services growth has moderated from its recent peaks, the manufacturing rebound provides optimism for balanced economic expansion in the coming quarters."
The composite PMI output index, which measures combined services and manufacturing output, reflected these contrasting trends, offering a comprehensive view of India's private sector performance as the country navigates global economic uncertainties and domestic challenges.
