India’s private-sector business activity strengthened in October, reaching its fastest pace in four months, but the improvement has yet to translate into fresh hiring, according to a preliminary purchasing managers’ survey released on Friday.
The HSBC Flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 56.7 in October from 55.9 in September. Readings above 50 indicate expansion. The result also exceeded the 56.1 median forecast in a Reuters poll, although it remained below the average recorded so far this year.
Services lead the improvement
Services activity drove most of the acceleration. The services PMI increased to 56.2 from 55.2, supported by stronger demand and new orders. However, employment in the sector was unchanged, ending a nine-month run of hiring growth.
Manufacturing output edged higher, but slower recruitment pulled the sector’s headline PMI down to 54.9 from 55.1. Companies reported that existing staff were sufficient to handle workloads, while overall backlogs declined at one of their fastest rates in nearly six and a half years.
Export orders improve as price pressures ease
Export orders grew at their fastest pace in six months, with the improvement concentrated among goods producers. Growth in overseas demand for services weakened, the survey indicated.
There was some relief on costs: input-cost inflation eased to its lowest level in almost a year, while increases in selling prices were the weakest since March 2025. Business confidence also recovered to its highest level since May, though it remained below this year’s average.
What does this mean for India?
The survey suggests that demand and business output are holding up, especially in services. But the pause in hiring is a reminder that stronger activity does not automatically mean more jobs. The PMI is an early survey-based indicator, not a final measure of GDP growth or employment; subsequent official data will provide a fuller picture.
Key takeaways
- Composite PMI: 56.7 in October, up from 55.9 in September.
- Services PMI: 56.2, compared with 55.2 in September.
- Manufacturing PMI: 54.9, down from 55.1.
- Hiring: Services employment was unchanged, ending a nine-month hiring streak.
- Costs: Input-cost inflation eased to its lowest level in almost a year.
GAWAH News Desk
