India Private Sector Growth Improves On Service Expansion

(RTTNews) - India's private sector growth accelerated somewhat in August as the service sector drove growth, though manufacturing output remained weak, according to flash survey results from S&P Global released Friday.

The HSBC flash composite output index rose to 54.6 in August from July's 52-month low of 54.3. A reading above 50 signals expansion. However, August marked the second-weakest expansion since March 2022.

New orders increased at a slightly faster pace in August, though growth momentum softened relative to recent years. Indian companies contended with challenging market conditions, intense competitive pressures, and reduced customer demand, which constrained expansion.

Foreign orders expanded solidly across India's private sector, though the rate of increase moderated in both manufacturing and services. Key markets driving overall growth included the United States, Germany, China, Singapore, and Japan.

Employment growth accelerated sharply, with job creation reaching the joint-fastest pace since June 2025 as rising demand prompted firms to expand their workforce.

On pricing, input costs continued climbing solidly in August due to higher electricity, raw material—particularly steel—and transport and technology expenses. Input price inflation, however, slowed to a 7-month low. Meanwhile, selling price inflation rose to its highest level in four months.

Business sentiment improved modestly in August, with companies expressing cautious optimism about market conditions over the coming year.