New Delhi — India’s economic momentum showed signs of easing in March, as rising energy costs and geopolitical tensions in West Asia weighed on both manufacturing and services activity, according to the latest PMI data.
The HSBC Flash India PMI Composite Output Index — which tracks combined activity across sectors — stood at 56.5, indicating continued expansion but at a slower pace compared to previous months.
According to Pranjul Bhandari, softer domestic demand impacted new orders, which grew at their slowest rate in over three years. This came despite a sharp rise in export orders. She also noted that while input costs surged, companies absorbed a portion of the pressure by compressing their margins instead of fully passing it on to customers.
The data, compiled by S&P Global, highlighted multiple challenges affecting business sentiment — including the ongoing Middle East conflict, volatile market conditions, and persistent inflationary pressures.
Cost burdens intensified significantly, with input costs rising at the fastest pace in 45 months and selling prices increasing at a seven-month high. However, the rise in selling prices lagged behind input costs, reflecting cautious pricing strategies by firms.
Growth in new orders remained subdued across both manufacturing and services, with overall sales expanding at the slowest pace since November 2022. Meanwhile, backlogs of work continued to rise for the fourth consecutive month, though only marginally.
On the manufacturing side, companies reported continued increases in purchasing activity and inventory levels, albeit at a slower rate than in February. Encouragingly, supplier delivery times improved, suggesting better vendor efficiency.
Despite current challenges, businesses remain optimistic about the year ahead. Firms expect output to grow over the next 12 months, supported by improved operational efficiency, stronger marketing efforts, and a steady pipeline of new client enquiries.
With inputs from IANS