The Composite output index eases from 59.3 in May as demand normalises, but reading stays well above the 50-mark expansion threshold
Key Takeaways
— HSBC Flash India Composite PMI fell to 57.4 in June from 59.3 in May, the weakest pace since March
— Manufacturing PMI eased to a three-month low of 54.5, down from 55.0 in May
— Services Business Activity Index slipped to 57.3 from 59.8, marking the weakest services expansion in 17 months
— Input cost inflation eased for a third straight month to its lowest level since January
— Order-to-inventory ratio improved, signalling resilient manufacturing activity ahead
India’s private-sector growth slowed in June, with the HSBC Flash India Composite PMI Output Index easing to 57.4 from a final reading of 59.3 in May, according to preliminary data released by S&P Global and HSBC on June 23, 2026. The reading marked the weakest pace of expansion since March, though it stayed well above the 50-mark expansion threshold.
Manufacturing and Services Both Lose Steam
The Manufacturing PMI slipped to a three-month low of 54.5 in June from 55.0 in May. The Services Business Activity Index fell to 57.3 from a final May reading of 59.8, its softest growth in 17 months, with firms citing intensifying competition and slower local contract wins.
Pranjul Bhandari, Chief India Economist at HSBC, said private-sector activity eased in June as manufacturing output growth softened after several months of aggressive inventory-building.
Export Orders: Services Up, Manufacturing Down
Export trends diverged sharply across sectors. Services firms reported faster growth in international business, while manufacturers recorded their weakest increase in new export orders since March 2023. At the composite level, overall international sales growth slowed to its weakest pace in 21 months.
Domestic Demand Still the Anchor
Despite the slowdown, domestic demand continued to underpin order books across both sectors. The order-to-inventory ratio, a forward-looking gauge of production trends, ticked up in June after three straight months of decline, suggesting factories could need to step up output in coming months. This follows a period where finished goods stocks had climbed to an 11-year high in May.
Cost Pressures Ease, Margins Hold Modestly
Input cost inflation across the private sector eased for a third consecutive month to its lowest level since January. Output prices also softened, which kept the resulting margin cushion modest rather than significant heading into the next quarter.
Hiring and Confidence Soften
Employment growth slowed to the weakest pace in the current six-month expansion streak, the softest hiring since December 2025. Business confidence cooled to its weakest level since January, with manufacturing sentiment at its lowest in nearly four years.
| Indicator | June 2026 Flash | May 2026 Final |
|---|---|---|
| Composite PMI Output Index | 57.4 | 59.3 |
| Manufacturing PMI | 54.5 | 55.0 |
| Manufacturing Output Index | 57.4 | 58.0 |
| Services Business Activity Index | 57.3 | 59.8 |
Source: HSBC, S&P Global PMI
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Bottom Line
The June flash PMI confirms a normalisation in growth momentum rather than a sharp slowdown, with India’s composite reading still among the strongest globally. Markets will watch the final PMI print and the next RBI policy commentary for confirmation that domestic demand keeps the expansion on track through Q2 FY27.
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FAQs
What is India’s HSBC Flash PMI for June 2026?
The HSBC Flash India Composite PMI Output Index stood at 57.4 in June 2026, down from 59.3 in May.
Is India’s manufacturing PMI still in expansion?
Yes. The Manufacturing PMI was at 54.5 in June 2026, above the 50-mark threshold that denotes expansion.
Why did India’s PMI growth slow in June 2026?
Growth eased mainly due to softer hiring, weaker manufacturing export orders, and a slowdown in inventory-building after several hectic months.
SEBI Disclaimer: NiftyTrader is a financial markets information platform. This article is for informational purposes only and does not constitute investment advice.
