The HSBC flash Composite Purchasing Managers’ Index (PMI), produced by S&P Global, fell to 58.1 this month from April’s final figure of 58.2, though it exceeded a Reuters poll median estimate of 58.0. A reading above 50 indicates growth.
The slowdown in May was largely concentrated in manufacturing, where new orders grew at one of the slowest paces in nearly four years, and production growth decreased to its second-lowest level since mid-2022. The factory PMI declined to 54.3 in May from 54.7 in April.
In contrast, the services PMI business activity index experienced a slight increase, rising to 58.9 from 58.8.
New export orders in the private sector grew at their slowest rate in 19 months, with respondents citing the Middle East conflict and travel disruptions as factors negatively impacting international demand.
Input costs rose overall, driven by manufacturing expenses increasing at their highest rate since July 2022 due to elevated prices for energy, steel, and food. Companies moderated the transfer of these increased costs, leading to output charges at the composite level rising at the slowest rate since January.
Service providers added staff at the fastest rate in almost a year, surpassing the manufacturing sector where job creation has weakened.
With business confidence declining to a three-month low, the latest data indicate that ongoing cost pressures and waning global demand are beginning to test the resilience of India’s growth engine.
