Business confidence also weakened. Companies remained optimistic about output over the next 12 months, but the overall level of optimism fell
India’s private sector activity slowed to a three-month low in June as demand slowdown weighed on output and hiring, according to the HSBC Flash India PMI released on June 23.
The HSBC Flash India Composite PMI Output Index fell to 57.4 in June from 59.3 in May, signalling a sharp but softer expansion in business activity. A reading above 50 indicates expansion, while a print below 50 signals contraction. The June reading was the weakest since March.
Business confidence also weakened. Companies remained optimistic about output over the next 12 months, but the overall level of optimism fell. Among manufacturers, positive sentiment dropped to its lowest level in nearly four years.
The moderation was visible across both manufacturing and services. The HSBC Flash India Services PMI Business Activity Index eased to 57.3 from 59.8 in May, while the Manufacturing PMI slipped to 54.5 from 55.0, marking a three-month low.
New orders continued to rise strongly, but the pace of expansion slowed to the weakest in three months as some firms struggled to secure fresh work. Competitive pressures, rising fuel prices and shortages of gas were also cited as constraints.
“Private sector activity eased a bit in June. Growth of manufacturing output softened a tad as inventory-building lost steam after a few hectic months. New export orders remained resilient and the order-to-inventory ratio ticked up, pointing at resilient manufacturing activity down the line. Input costs across the private sector rose, but at the slowest pace in five months,” said Pranjul Bhandari, chief India economist, HSBC.
Export trends were mixed, services firms reported faster growth in overseas business, but manufacturers saw the weakest increase in new export orders since March 2023.
The slowdown in new business also affected hiring. Hiring by both goods producers and service providers was the weakest since December 2025.
