Business EconomyPosted at: Oct 23 2026 3:34PM


India's private sector growth hits four-month high in October as services pick up

New Delhi, Oct 23 (UNI) India's private sector recorded its strongest expansion in four months in October, supported by improving services activity and a faster rise in new business, according to the HSBC Flash India Purchasing Managers' Index (PMI) survey released on Friday.
The HSBC Flash India Composite Output Index climbed to 56.7 in October from 55.9 in September, signalling an acceleration in overall business activity. The latest reading marked the fastest expansion since June, although it remained below the average recorded so far in 2026. The index has stayed above the 50-point threshold separating growth from contraction for 63 consecutive months.
Services led the improvement, with the Services PMI Business Activity Index rising to 56.2 from 55.2 in the previous month. In contrast, the Manufacturing PMI eased marginally to 54.9 from 55.1, reflecting slower hiring in factories despite continued growth in production and demand.
Manufacturing output strengthened slightly, with the corresponding index increasing to 57.6 from 57.5. Businesses across the two sectors benefited from improved market conditions and an increase in new orders, the survey showed.
A notable development was the acceleration in international demand. New export orders recorded their fastest increase in six months, with companies reporting stronger demand from markets including the United States, the United Kingdom, West Asia and Bangladesh.
Pranjul Bhandari, chief India economist at HSBC, said manufacturing output and overall new order growth remained broadly stable compared with September, but the latest figures pointed to a significant improvement in export demand.
Despite the improvement in business activity, employment growth remained subdued in October. Job creation across the private sector was marginal and grew at its slowest pace of the year so far.
Services companies kept their workforce levels unchanged, ending a nine-month period of employment growth. Manufacturing businesses continued to recruit, but the increase in staffing was limited.
The survey also indicated a decline in unfinished business for the third time in four months. The pace at which backlogs were cleared was the joint-fastest in six-and-a-half years, matching the rate recorded in August 2021. The latest reduction was also among the steepest since the global financial crisis, according to the survey.
Price pressures showed further signs of moderation in October, with input cost inflation slowing for the seventh consecutive month to its lowest level in nearly a year. Both manufacturing and services businesses reported weaker increases in input costs, although some firms continued to face higher steel and transportation expenses.
The pace of increase in selling prices also softened, reaching its slowest level since March 2025. Manufacturers raised their stocks of purchases and finished goods amid the easing of input cost pressures and a more moderate increase in selling prices.
According to Bhandari, the rise in factory-gate prices slowed to its weakest pace in almost four years, indicating that manufacturers were facing less pressure to pass higher costs on to customers.
The October flash PMI offers an early indication of the final monthly manufacturing, services and composite readings. It is based on approximately 90 per cent of the survey responses typically used to calculate the final indices.
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