India's private sector expansion slowed in November as both new orders and business activity grew at their weakest pace since May, with the HSBC Flash India Composite Output Index slipping to 59.9 from 60.4 in October, according to HSBC Flash PMI data released on Friday.
The seasonally adjusted index, which tracks month-on-month output across manufacturing and services, remained comfortably above the 50.0 threshold and its long-run average of 54.9, signaling strong growth. However, November's reading marked the softest improvement in six months amid cooling demand.
Overall sales increased sharply but at the least pronounced rate since May. Firms reported difficulties securing new business, alongside weather-related disruptions from heavy rainfall. International sales expanded at the slowest pace since March, with survey respondents citing stronger global competition and cheaper alternatives in overseas markets.
Manufacturing weakened, with the HSBC Flash India Manufacturing PMI dropping to 57.4 in November from 59.2 in October - the slowest improvement in operating conditions in nine months, though still above its historical trend. Factory production rose at the weakest pace since May, reflecting softer domestic demand. Service-sector activity, in contrast, picked up slightly from October.
"The HSBC flash manufacturing PMI eased, though the improvement in operating conditions remained healthy," HSBC Chief India Economist Pranjul Bhandari said. "The rise in new export orders matched October, but overall new orders softened, indicating that the GST-led boost may have peaked."
Moderating sales and continued declines in outstanding workloads limited hiring. Employment rose for a forty-second consecutive month but at the slowest pace in more than 18 months, with both manufacturers and service providers reporting milder job creation.
Inflationary pressures eased further. Input costs rose only marginally, marking the weakest increase in nearly five-and-a-half years, while output charge inflation slipped to an eight-month low. Both sectors reported broad-based cooling in cost and price pressures.