MUMBAI: Private sector business activities, as measured by HSBC Flash India PMI Composite Output, fell to a three-and-a-half-year low in March amid a drastic drop in demand and a spike in costs due to the ongoing West Asia conflict.
The index slipped to 56.5 in March, marking the weakest growth since October 2022. The composite PMI was 58.9 in February.
HSBC attributed the poor show to the West Asia conflict, weaker domestic demand, market instability, and inflationary pressures. “Output growth eased across both manufacturing and services as the energy shock unfolds.
Softer domestic demand weighed on new orders, which rose at the slowest pace in more than three years, despite a record surge in new export orders. Cost pressures intensified, but companies are absorbing part of the increase by squeezing margins,” said Pranjul Bhandari, chief economist at HSBC India.
The slowdown was more pronounced in the manufacturing sector, where output growth eased amid global uncertainties. Factory output expanded at its slowest pace since August 2021.
The manufacturing PMI dropped to 53.8 in March from 56.9 in February, a four-and-a-half-year low, while the manufacturing output index fell to 55.1.
Services activity also moderated, with the business activity index easing to 57.2 from 58.1, marking the weakest growth since January 2025.
On a positive note, data showed that exports remained strong, driven by robust demand from Asia, Europe, the US, and West Asia.