The HSBC flash Purchasing Managers’ Index (PMI) survey released on Monday said the private sector output in India increased at a slower pace in March as compared to the previous month.
The pace was amid a quicker expansion in manufacturing activity and a softer increase in services activity.
“Manufacturing was March’s brighter spot, posting quicker increases in sales and output that were faster than those registered in the service economy,” the survey noted.
The index compiled by S&P Global fell to 58.6 in March from February’s final reading of 58.8. The index, which measures monthly change in the combined output of India’s manufacturing and service sectors, has been above the neutral 50-mark that separates growth from contraction for the 44th consecutive month.
“India’s private sector economy ended the FY25 on strong footing, sustaining robust expansions in new business intakes and output. Rates of growth softened from February though remained well above their respective long-run averages,” the survey said.
In the manufacturing sector, the flash PMI, which is a composite measure of new orders, output, employment, supplier delivery times, and inventory levels, noted improvement in operating conditions that were broadly aligned with the average for FY25.
Pranjul Bhandari, chief India economist at HSBC, said that India’s manufacturing sector expanded at a faster pace in March, according to the flash PMI as the output index rose to its highest level since July 2024.
“Yet the margin squeeze on manufacturers intensified as input price inflation ticked up while factory gate prices rose at the weakest rate in a year. The moderation in new export orders growth was also noteworthy amid tariff announcements,” she added.
The survey said when explaining the increase in output, private sector companies mostly remarked on positive demand trends. Indeed, new orders rose further, thereby stretching the current sequence of expansion to over three-and-a-half years.
On the employment front, the survey noted that despite slowing to a six-month low, the aggregate pace of job creation was solid by historical standards.
“For the first time in seven months, manufacturers signaled a faster increase in headcounts than service providers,” the survey said.