India’s private sector growth slows to three-month low in June as demand weakens, costs rise: HSBC PMI

New Delhi: Private sector growth in the country slowed to a three-month low in June, as increasing costs and declining demand weigh on business momentum, according to a private survey released on Tuesday.

The HSBC Flash India Composite Purchasing Managers’ Index (PMI) fell to 57.4 this month from 59.3 in May. Readings above 50 signal expansion and those below the threshold indicate contraction.

“Private sector activity eased a bit in June,” said Pranjul Bhandari, chief India economist at HSBC. Manufacturing output growth moderated as inventory-building lost steam after a few hectic months, according to her.

Meanwhile, manufacturing PMI fell to 54.5 in June from 55 in May, while the services PMI declined to a 17-month low of 57.3 from 59.8 during this period.

Despite the slowdown, firms remained optimistic about output growth over the next 12 months. However, overall confidence weakened to its lowest level since January and remained below the long-term average.

“Notably, the level of positive sentiment at manufacturers fell to the lowest in close to four years,” the survey said.