India's Private Sector Growth Eases to 10-Month Low in December

India's private sector expansion slowed in December, with new orders and business activity growing at their weakest pace since February.

The HSBC Flash India Composite Output Index slipped to its 10-month low of 58.9 from 59.7 in November, according to HSBC Flash PMI data released on Tuesday.

The seasonally adjusted index, which tracks month-on-month output across manufacturing and services, remained comfortably above the 50.0 threshold, indicating expansion.

The weaker increases in output indicated easing of growth in new orders, which continued to rise amid reports of improving customer demand. While the pace of increase in total new orders eased, the rate of growth in new export orders accelerated to hit a three-month high in December, data showed.

Manufacturing weakened, with the HSBC Flash India Manufacturing PMI dropping to 55.7 in December from 56.6 in November, the slowest improvement in the health of the manufacturing sector for two years. HSBC Flash India Services PMI Business Activity Index also slipped to 59.1 in December from 59.8 in November.

Employment levels were broadly unchanged in December, as both the manufacturing and services sectors suggested that their current workforce was sufficient to cater to new order inflows.

Inflationary pressures also remained muted in December. Input costs rose slightly at a pace that was only marginally faster than the near five-and-a-half-year low posted in November.

As the year draws to a close, companies remain confident that growth will be maintained in 2026, but optimism continues to soften. According to the report, business sentiment slipped for the third month in December to the lowest since July 2022.