New Delhi: India's private sector growth appears to have lost some momentum in May, with the latest HSBC Flash PMI showing softer growth in output, new orders, exports, and employment.
Data released by S&P Global suggests that while business activity continued to expand, the rebound after March's sharp slowdown did not strengthen further.
The HSBC Flash India Composite PMI Output Index came in at 58.1 in May from 58.2 in April, with the Services PMI Business Activity Index edging up to 58.9 from 58.8.
However, weaker manufacturing activity offset these gains, with the Manufacturing PMI Output Index slipping to 56.6 from 56.9 and the headline Manufacturing PMI falling from 54.7 to 54.3.
All readings remained above 50, signalling expansion from the previous month, but the direction of change suggests that the April recovery did not gather further pace.
The loss of momentum was most visible in demand conditions, with new business at manufacturers and service providers growing at a softer pace, pulling down growth at the composite level.
Companies cited competitive pressures, weak demand, travel disruptions, and the West Asia war as factors weighing on sales.
Manufacturing, which led the rebound in April, lost some pace in May, with factory output continuing to grow but at its second-slowest pace since mid-2022.
New export orders across the private sector rose at the slowest pace in 19 months, while input price inflation at the composite level rose to its second-highest level in nearly three years.
Firms reported higher prices for energy, food, fuel, gas, iron, leather, oil, plastics, rubber, steel, and transportation, but continued to absorb part of the increase rather than fully passing it on to customers.
There was little sign of capacity pressures, with backlogs slipping marginally below the neutral 50 mark.
Even so, firms continued to hire, supported by confidence in future activity, with services employment growing at the fastest pace in nearly a year.
Overall business confidence remained above its long-run average but slipped to a three-month low.
Manufacturers also continued to build inventories, suggesting caution remains, with buying activity and stocks of purchases rising at the fastest pace in three months.
