Indian private sector expanded at a slower pace in the month of August due to a softer rise in manufacturing output and weakening of new orders. The headline HSBC Flash India Composite Output Index - a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors - stood at 60.5 in August, little changed from 60.7 in July and pointing to a sharp rate of expansion that was above its long-run trend level (54.6).
Further, the HSBC Flash India Manufacturing PMI - a single-figure snapshot of factory business conditions calculated from measures of new orders, output, employment, supplier delivery times and stocks of purchases - slipped from 58.1 in July to a three-month low of 57.9 in August. The latest reading was nevertheless above the historical average (54.0) and signalled a strong improvement in the health of the sector.
On the price front, charge inflation climbed to a near 11-year high at goods producers, whilst softening at service providers. At the composite level, the latest increase in selling prices was solid and above its long-run average, despite softening since July. Meanwhile, private sector companies in India forecast higher output levels in the year ahead, amid expectations that demand conditions will remain favourable.
