Context:
In a sobering first indicator about India’s economy in 2025, private sector activity appears to have hit the brakes in January with output and growth levels sliding to a 14-month low, as per the survey-based HSBC Flash Purchasing Managers’ Indices (PMI).
India’s Economic Slowdown in January 2025 Key Insights from HSBC Flash PMI Economic Activity
India’s private sector growth eased to a 14-month low in January 2025 according to the HSBC Flash Purchasing Managers Indices PMI. The composite PMI decreased to 579 from Decembers 592 which suggests slower private sector activity growth Manufacturing Sector.
Key Highlights:
- Better Activity
- Factory PMI rose to 580 its highest since July 2024 driven by new orders that expanded the most since March 2024.
- Ease of Cost Pressures
- Input cost inflation for factories eased to a 10month low cushioning profit margins.
- Boost in Confidence
- The degree of manufacturers optimism improved the strongest since May 2024.
Services Sector
- Sharp Slowdown
- Services PMI declined to 568 from 593 in December the slowest growth since November 2023 .
- Cost Pressures Increase
- Services companies witnessed an 18month high for cost inflation from higher costs in labor raw material and other essentials.
- Optimism Dropped
- Business optimism of service industry declined to a three month low mainly due to a low domestic demand.
Trends Across Sectors
- Global sales are rebounding Export growth was strong the fastest in six months for both goods and services.
- Capacity pressures building Outstanding business volumes grew at their fastest in 25 years suggesting growing pressure on production capacities.
- Cost Trend Diverging: Manufacturing was suffering from ease in cost pressure but services companies struggled with rising input costs.
