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Informist, Friday, Jan. 24, 2025

 

--India Jan flash composite PMI output index 57.9 vs 59.2 Dec final 

--India Jan flash services PMI activity index 56.8 vs 59.3 Dec final 

--India Jan flash manufacturing PMI 58.0 vs 56.4 Dec final 

 

NEW DELHI – India's private sector economy slowed down at the start of the new year, with the services sector declining to a 26-month low in January even as the manufacturing sector output rose to a six-month high. The HSBC Flash India Composite Purchasing Managers' Output Index, compiled by S&P Global, fell to a 14-month low of 57.9 in January from the final print of 59.2 in December.

 

The flash manufacturing PMI rose to 58.0 this month from December's final print of 56.4, while the services PMI fell to 56.8 from 59.3 last month. A PMI reading of more than 50 denotes expansion in activity from the previous month, while a print below it indicates contraction.

 

"India's manufacturing sector started the year strong, with output and new orders bouncing back from a relatively weak third fiscal quarter," Pranjul Bhandari, chief India economist at HSBC, was quoted as saying in the release. "The cooling in growth in new domestic business in the services sector, however, highlights a potentially emerging weak spot in the economy."

 

Output growth was the slowest since November 2023, mainly because the rise in new business intakes receded in January. Moreover, input cost pressures increased this month, which pushed companies to charge higher prices.

 

The flash PMI data comes days ahead of the Union Budget for 2025-26 (Apr-Mar). The Budget will be presented at a time when the Indian economy has slowed down considerably. India's GDP growth is estimated at a four-year low of 6.4% in FY25, as per government data. 

 

Sales at manufacturing companies rose faster than their services sector counterparts, S&P Global said. Factory orders rose at the quickest pace for six months, while the increase in new business for the services sector was the slowest since November 2023.

 

Domestic sales were a weak point for private companies in January, while both manufacturers and service providers indicated stronger increases in exports than in December. Aggregate international sales rose at the fastest pace in six months, S&P Global said, adding that companies highlighted gains from across the globe, including the Americas, Asia and Europe.

 

Job creation improved across the two sectors and the expansion in aggregate employment in January was the best since comparable data became available in December 2005, S&P Global said. Survey members suggested that permanent and temporary workers had been hired on both part- and full-time bases.

 

Cost pressures increased at the composite level, though trends varied for the two sectors. Among manufacturing companies, inflation fell to a 10-month low and was modest by historical standards. On the other hand, the expenses of service providers increased to the greatest degree in nearly a year-and-a-half.

 

"Survey participants reported greater chemical, labour, leather, meat, rubber and vegetable costs. As for selling prices, rates of inflation were broadly similar at goods producers and service providers," S&P Global said. Output charges increased quicker than in December and were above the long-run average cost.  End

 

Reported by Shubham Rana

Edited by Tanima Banerjee

 

 

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