(Bloomberg) -- India’s economic activity in September slowed to the weakest pace this year following a drop in both the services and manufacturing sectors, a flash survey by HSBC Holdings Plc showed.
The manufacturing purchasing managers’ index declined to 56.7 from 57.5 in August, while the services purchasing managers’ index dropped to 58.9 from 60.9 in the previous month. The composite PMI fell to 59.3 from 60.7 the previous month.
The indexes, which show business confidence in the economy, are based on preliminary surveys. The data may be revised when final PMI figures are released next month. A reading above 50 indicates expansion compared with the previous month, while a print below that indicates contraction in economic activity.
“Rates of increase in output charges slowed in both sectors, with manufacturers experiencing a larger slowdown, implying a bigger reduction in their margins,”said Pranjul Bhandari, chief India economist at HSBC, in the statement.
The slip in activity comes even as the central bank projects India will remain the fastest-growing major economy in the world, expanding over 7% in the year through March 2025. Strong growth has prompted the Reserve Bank of India to keep its interest rate unchanged for over 18 months, though most economists expect a cut by December.
The expansion in total business activity generally reflected increasing new orders, though the pace of growth for new business and export orders eased, according to HSBC. The pace of job creation increased compared with August and remained above the series average, it said. The rise in employment in the service sector was the steepest since August 2022, as companies responded to robust growth in new orders, HSBC said.
(Updates with additional details in sixth paragraph)
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