Business growth in India slows in December; HSBC Composite PMI falls to 58.9 from 59.7 in Nov
New Delhi, December 16
The pace of business growth in India slowed slightly in December, but overall activity in the private sector remained strong, according to the latest HSBC PMI data released on Tuesday.
The HSBC PMI Composite Index, which combines the output of India's manufacturing and service sectors, fell to 58.9 in December from 59.7 in November. Even though the index declined, it stayed well above the 50.0 mark, which shows that business activity is still growing.
The December reading pointed to the softest growth in business output since February, but it continued to signal a steep expansion across the private sector.
The data showed that both manufacturing and service sectors saw slower growth in business activity during December. This slowdown was mainly due to a softer rise in new orders. However, new orders continued to increase sharply, supported by reports of improving customer demand.
HSBC stated, "The index was down from 59.7 in November and pointed to the softest output growth since February."
According to the HSBC Flash India Composite Output Index, business activity in the Indian private sector continued to rise strongly in the final month of 2025. At the same time, the rate of expansion eased compared to the previous month. Growth in new orders also slowed towards the end of the year, but it remained at a healthy level.
The data further pointed out that companies largely kept their staffing levels unchanged in December. This means that businesses neither hired many new workers nor reduced jobs significantly.
Business confidence also softened further, showing that companies are becoming a little more cautious about the future. Inflation pressures remained muted, indicating that costs were not rising sharply.
In the manufacturing sector, growth also showed signs of slowing. Weaker increases were seen in both output and new orders. Along with this, employment growth and stocks of purchases expanded at a slower pace. Suppliers' delivery times shortened further, which often reflects better supply conditions.
Due to these factors, the HSBC Flash India Manufacturing PMI declined to 55.7 in December from 56.6 in November.
The December reading marked the smallest improvement in the health of the manufacturing sector in the past two years. Still, the index remained well above the long-term average, showing that manufacturing activity continued to expand at a solid pace.
Looking ahead to 2026, HSBC stated that the companies remain confident that business growth will continue. However, optimism has been weakening. Business sentiment fell for the third straight month in December and dropped to its lowest level since July 2022.
Overall, the HSBC PMI data suggests that while India's business growth slowed a bit in December, the economy remains on a strong growth path.
— ANI
Reader Comments
The fact that companies are not hiring much is a bit concerning. Growth should translate into more jobs for our youth. The "steep expansion" mentioned feels good on paper, but is it reaching the common man? We need job-led growth.
As a small business owner, I can relate. Post-Diwali, there's always a slight slowdown in new orders. But customer inquiries are still strong. The muted inflation pressure is the real good news here – helps us plan better without worrying about sudden cost spikes.
Interesting data. The softening business confidence for three straight months is the key indicator to watch. Global headwinds might be making Indian companies cautious about 2026. Hopefully, the budget will address some of these concerns.
Manufacturing PMI at 55.7 is still very healthy! The article says it's the smallest improvement in two years, but let's not forget the base effect. We were growing from a very high base. Shortened supplier delivery times show our logistics and supply chains are improving. ðŸ‘
The headline makes it sound negative, but the details are quite positive. Strong growth, muted inflation, stable employment. This is actually a sign of sustainable, stable growth rather than a boom-bust cycle. We should see it as a positive sign of maturity in the economy.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.