Business activity in India moderated in December, with the HSBC PMI Composite Index that measures India’s manufacturing and service sectors’ combined output, came in at 58.9, dropping from November’s 59.7. Despite this reduction, the index remained significantly above 50.0, indicating continued business expansion.HSBC noted, “The index was down from 59.7 in November and pointed to the softest output growth since February.” Although December registered the lowest growth rate since February, the private sector maintained substantial expansion levels. Analysis revealed decreased growth rates across both manufacturing and service industries in December, primarily attributed to a moderate increase in new orders. Nevertheless, new orders maintained strong momentum, driven by positive developments in customer demand, according to an ANI report quoting HSBC PMI data.Based on the HSBC Flash India Composite Output Index, the private sector saw robust business activity in the final month of 2025, albeit at a slower pace than the previous month. The growth in new orders displayed a similar trend, maintaining healthy levels despite the deceleration.The report indicated that December saw minimal changes in workforce numbers across companies, with employment levels remaining largely stable without significant hiring or redundancies.Organisations saw increased caution regarding future prospects, as evidenced by diminished business confidence. The inflation scenario was subdued, suggesting stable cost conditions.The manufacturing industry experienced a moderation in growth, with both output and new orders showing reduced momentum. Similarly, employment expansion and purchase stock levels grew more gradually. The reduction in suppliers’ delivery times suggested improved supply chain efficiency.The HSBC Flash India Manufacturing PMI showed a decrease to 55.7 in December compared to 56.6 in November.Whilst manufacturing activity maintained solid expansion above the long-term average, December’s figures indicated the most modest improvement in the sector’s health over the previous 24 months.For the outlook towards 2026, HSBC reported that firms maintain positive expectations regarding business growth continuation. Nevertheless, confidence levels have diminished, with business sentiment declining for the third consecutive month in December, reaching its lowest point since July 2022.The HSBC PMI findings indicate that despite India’s slight business growth deceleration in December, the economy continues to demonstrate robust expansion momentum.
Business growth slows December: HSBC Composite PMI drops to 58.9; softest output growth since February
