New Delhi, May 21: India’s private sector activity experienced a minor decline in May due to global instability, with the HSBC Flash India PMI Composite Output Index dropping to 58.1 from 58.2 in April, according to a private survey released on Thursday.
The composite PMI data from HSBC indicated that the rapid pace of the service economy compensated for weaker production in manufacturing.
The data also revealed a slight increase in input price inflation following a decline in April. However, companies limited the burden of additional costs on customers by raising production charges minimally. During this period, the services sector outperformed manufacturing and faced less inflationary pressure.
Pranjul Bhandari, Chief India Economist at HSBC, stated, “The slowdown in the growth rates of production and new orders has led to a slight decline in manufacturing activity, while the growth in new export orders has sharply decreased. Nonetheless, due to ongoing inventory levels, the manufacturing PMI remained broadly in line with its long-term average.”
He further noted, “In May, finished goods inventories rose for the second consecutive month, with the fastest increase in purchasing inventories recorded in the last three months. Cost pressures intensified, and input prices saw the sharpest rise since July 2022.”
According to PMI data, the growth rate of new business in both manufacturing and services slowed in May, resulting in an overall decline in the growth rate.
The private sector economy in India saw a slow growth in new export orders in May, marking the lowest increase in the past 19 months. The PMI data indicated that goods producers recorded the second-slowest growth in international sales since September 2024 (before February 2026).
Business confidence remained quite positive in May, although the overall level of positive sentiment fell to a three-month low, yet it remained above its long-term average.
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