India’s private sector activity experienced a robust acceleration in October, expanding at its fastest pace in four months driven by a noticeable recovery in new business demand and stronger momentum across services output. According to the latest HSBC Flash India Composite Output Index, which measures combined activity across both the manufacturing and services sectors, the private sector output index climbed to 56.7 in October from 55.9 in September. This marked the strongest growth reading recorded since June, continuing an impressive streak where the overall composite index has stayed above the critical 50-point expansion threshold for 63 consecutive months. A breakdown of the underlying indicators reveals a minor divergence between sectors: while the Manufacturing Purchasing Managers’ Index (PMI) edged down slightly to 54.9 from 55.1 in September due to a slowdown in factory hiring, the Manufacturing Output Index actually rose modestly to 57.6 from 57.5. Meanwhile, the Services PMI Business Activity Index staged a notable recovery, jumping to 56.2 from 55.2 in the previous month. Survey findings indicated that improved overall market conditions and higher volumes of new orders underpinned this broad activity surge, with total new business growth quickening considerably. A major catalyst behind this uptick was international demand, as new export order growth hit a six-month high with companies reporting heightened interest from key markets including the United States, the United Kingdom, West Asia, and Bangladesh. HSBC Chief India Economist Pranjul Bhandari pointed out that while manufacturing output and order growth remained steady, export sales surged at their fastest clip since June 2025. However, despite the buoyant top-line growth figures, employment across the private sector posted only a marginal increase, recording its slowest expansion rate so far this year. Services companies paused their nine-month streak of staff additions by keeping overall headcounts flat, whereas manufacturing firms expanded their workforce only marginally. This weak employment picture coincided with a further reduction in outstanding workloads; backlogs of work decreased for the third time in four months, registering a depletion rate that matched August 2021 levels and represented one of the sharpest drops seen since the global financial crisis. On the price front, input cost inflation offered significant relief to businesses, easing for the seventh consecutive month to hit its lowest level in nearly a year. Smaller input price increases were observed across both manufacturing and service providers, though firms that experienced cost pressures cited elevated steel prices and higher transportation costs as key contributors. Overall, the flash PMI data highlights an economy benefiting from resilient demand and domestic strength.
