India’s Private Sector Momentum Slows to 3 Month Low in June

India's private sector recorded a slower pace of growth in June, with both manufacturing and services activity moderating during the month. The latest HSBC Flash India Composite Purchasing Managers' Index (PMI) showed weaker demand conditions, softer employment growth and declining business sentiment. 

Demand Growth Loses Momentum 

The Composite PMI fell to 57.4 in June from 59.3 in May, marking the weakest expansion in 3 months. However, the index remained above the 50-point mark, indicating that business activity continued to expand. 

Growth in new orders also slowed to its weakest pace since March. Businesses attributed the moderation to competitive pressures and gas shortages, which affected their ability to secure new work. 

Manufacturing and Services Activity Moderate 

The slowdown was visible across both major sectors. 

The Services PMI declined to 57.3 from 59.8, reaching its lowest level in 17 months. Meanwhile, the Manufacturing PMI eased to 54.5 from 55.0, its lowest reading in 3 months. 

Export demand remained uneven. Services companies reported slightly faster growth in international sales, while manufacturers recorded their weakest increase in new export orders since March 2023. 

Hiring and Cost Trends 

A moderation in demand also affected recruitment activity. Employment across the private sector rose only marginally in June, making it the weakest increase during the current 6 month expansion period. Hiring at both factories and service providers fell to its lowest level since December. 

Input cost pressures eased for a third consecutive month, reaching their lowest level since January. Selling price inflation also softened, with firms raising prices at the slowest pace in 6 months as some businesses chose not to fully pass higher costs on to customers. 

Read More: India Core Sector Growth Slows To 0.5% In May 2026 Amid Output Contractions! 

Conclusion 

Business confidence slipped below its long-run average in June and fell to its lowest level since January. Among manufacturers, sentiment weakened further, reaching its lowest level in nearly 4 years, reflecting softer demand and slower growth across the private sector.   

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