India Private Sector Growth Weakest Since March 2022

(RTTNews) - India's private sector activity expanded at the slowest pace in nearly four-and-a-half years in July amid intensifying inflationary pressures and challenging market conditions, flash survey results from S&P Global showed on Friday.

The HSBC flash composite output index dropped to 54.3 in July from 57.1 in June. However, a score above 50 indicates expansion in the sector.

The slowdown in growth was attributed to more challenging market conditions, competitive pressures, order cancellations, reduced client inquiries, and shortages of key raw materials, the survey revealed.

New orders rose at the weakest pace in close to four-and-a-half years, which was more evident in the service economy, where rates of expansion in both output and new business retreated substantially from June to the weakest in 53 months.

The services PMI business activity index dropped to 53.1 in July from 57.4 in June. Meanwhile, the manufacturing industry recovered some of the momentum it had lost previously, though the manufacturing PMI dropped to 53.9 from 54.2.

On a positive note, international sales logged the strongest upturn in the Indian private sector since March.

On the price front, input price inflation accelerated from June, driven by higher costs for fuel, labor, materials, and transportation. As a result, selling price inflation rose to a 3-month high.

Employment in the Indian private sector expanded for the seventh successive month, though the pace of job creation was modest. '

Looking ahead, business confidence eased to a 6-month low in July, with optimism strengthening at manufacturing firms but weakening across services.