Pvt sector activity down, mfg up in Jan

Owing to a steep decline in services, private sector activity dropped to a 14-month low of 57.9 in January, down from a four-month high of 59.2 in December 2024. Manufacturing, however, signaled a bounce back.

The preliminary results of the HSBC India Composite PMI Flash reading showed that it was below 58 for the first time in 13 months. “Indian private sector companies started 2025 with a slowdown in growth. With the rise in new business intakes receding, aggregate output increased at the weakest pace since November 2023,” said HSBC in a press release.

However, manufacturing did better as factory output rose to a six-month high of 58 from 56.4 in December 2024. “India’s manufacturing sector started the year strong, with output and new orders bouncing back from a relatively weak third fiscal quarter. The rise in new export orders was especially noticeable and the easing of input cost inflation is also good news for manufacturers,” said Pranjul Bhandari, chief India economist, HSBC.

“The cooling in growth in new domestic business in the services sector, however, highlights a potentially emerging weak spot in the economy. New export business for service providers, on the other hand, looks set to maintain its growing momentum,” he added.

The uptick in manufacturing activity also provided a boost to business confidence, with sentiment at the highest since May 2024. Services sentiment, on the other hand, declined to a three month low.