Indian Private Sector Logs Weakest Expansion Since October 2022

(RTTNews) - India's private sector activity grew at the slowest pace in nearly three-and-a-half years amid inflationary pressures and unstable market conditions along with the impact of the Middle East war, flash survey results from S&P Global showed on Tuesday.

The HSBC flash composite output index dropped to 56.5 in March from 58.9 in February. Nonetheless, a score above 50 indicates expansion in the sector.

The survey revealed that the Middle East war, unstable market conditions, and inflationary pressures all dampened growth.

The growth in factory output was the softest since August, with the manufacturing PMI falling to 53.8 in March from 56.9 in the previous month.

Similarly, service providers also indicated the weakest upturn in business activity since January 2025, linked to disruptions to international travel and the negative impact of the joint strikes by the US and Israel and Iran's counterattacks. The services PMI dropped to 57.2 from 58.1.

Total new orders received by Indian private sector companies grew at the slowest pace since November 2022. However, international sales rose at a series-record pace, mainly led by service providers amid new business gains from clients in Asia, Australia, Canada, Europe, Latin America, the Middle East, and the US.

On the price front, input price inflation accelerated to a nearly four-year high, linked to higher costs for aluminum, chemicals, electronic components, energy, food, iron ore, leather, oil, rubber, and steel. As a result, selling price inflation climbed to a 7-month high.

Despite slower new order growth, companies raised their workforce numbers, and employment rose at a moderate pace that was nevertheless the quickest since last August. The hiring activity was stimulated by confidence in the outlook for business activity, pending orders, and pipelines of new work.

Looking ahead, Indian private sector firms were optimistic of an increase in output levels over the course of the coming 12 months.