Economic Buzz: India private sector growth improves marginally in August

India?s private sector activity improved marginally in August, with the HSBC Flash India PMI Composite Output Index rising to 54.6 from July?s 52-month low of 54.3. However, the reading remained the second-weakest since March 2022, reflecting subdued overall demand.

The improvement was led by services, where business activity and new orders picked up after hitting 53-month lows in July. In contrast, manufacturing growth weakened, with the HSBC Flash India Manufacturing PMI falling for the third consecutive month to 52.9, its weakest level in five years.

New orders increased slightly faster, while export orders continued to grow solidly, supported by demand from markets including the US, Germany, China, Singapore and Japan. Employment saw a strong rise, with job creation accelerating to the joint-fastest since June 2025. Hiring was concentrated in services, while manufacturing employment declined for the first time in two-and-a-half years.

Input cost inflation softened to a seven-month low, but selling price inflation strengthened, with overall charge inflation reaching its fastest pace since April. Business confidence also improved in August, as firms expected market conditions to strengthen over the coming year.

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