Growth across India's private sector economy faded slightly halfway through the first fiscal quarter, with the latest HSBC Flash PMI figures showing weaker increases in total new orders, international sales, employment and business activity. After retreating in April, input price inflation ticked higher, but firms limited the pass-through of additional cost burdens to clients by lifting output charges to a lesser extent. Service providers outperformed manufacturers and experienced softer inflationary pressures. Registering 58.1 in May, the HSBC Flash India PMI Composite Output Index ' a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors ' was down only marginally from 58.2 in April and therefore signalled another marked expansion in private sector activity. Underlying data showed that a pick-up in growth across the service economy was offset by a weaker increase in factory production, one that was the second-slowest since mid-2022 (ahead of that seen in March). Manufacturing PMI fell to 54.3 in May from 54.7 in April, marking the second-weakest improvement in factory conditions in nearly four years, ahead only of the level seen in March. Meanwhile, services PMI inched up to 58.9 in May from 58.8 in April.
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