India’s November business growth slows to 6-month low on weak manufacturing, PMI shows

BENGALURU: India’s private sector activity expanded at its slowest pace in six months in November as manufacturing growth slipped to a nine-month low, offsetting an uptick in services, according to a private survey on Friday.

HSBC’s flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, retreated to 59.9 this month from October’s final reading of 60.4 and slightly lower than a Reuters median forecast of 60.1.

While the index remains comfortably above the 50-mark separating growth from contraction, a decline for three consecutive months suggests India’s economy is losing momentum.

The flash India Manufacturing PMI slumped to a nine-month low of 57.4 in November from 59.2 last month. Factory production growth was the weakest since May as firms reported subdued intakes of new business.

Survey participants said the slowdown stemmed partly from “heavy rain” across some regions of the country and challenges in securing orders due to competitive pricing from rivals in global markets.

“Overall new orders came in soft, indicating that the GST (goods and services tax)-led boost may have peaked,” said Pranjul Bhandari, chief India economist at HSBC.

The country’s dominant services industry, however, provided a buffer as activity accelerated to 59.5 from 58.9 in October.

New export orders across the private sector rose at the slowest pace since March, suggesting the 50% punitive U.S. tariffs on imports from India are affecting international demand.

India’s merchandise trade deficit hit a record high last month with exports to the U.S. falling nearly 9% year-on-year.

A recent cabinet announcement showed the Indian government plans to spend over $5 billion, including credit guarantees and bank loans to help offset the impact of U.S. tariffs.

Optimism around year-ahead output slipped to its lowest level since July 2022. That affected the pace of job creation which slowed to a low of over a year and a half.

Also, inflationary pressures cooled in November. While input costs rose at their weakest rate in over five years, output charge inflation hit an eight-month low. That points to further easing in overall price pressures.

India’s consumer inflation hit a record low of 0.25% last month, increasing chances of monetary policy easing. The Reserve Bank of India is widely expected to cut its key repo rate by a quarter-point next month.