The HSBC India Manufacturing PMI slipped to 52.8 in August, a third straight monthly decline.
Services sector told a different story. The HSBC India Services PMI Business Activity Index rose to 54.1 in August.
Manufacturers reported their slowest improvement in business conditions in five years, with new orders drying up and jobs shrinking for the first time in well over two years.
Services, by contrast, picked up speed, with hiring at the fastest rate in over a year, helping keep the overall private sector expanding at an unchanged pace.
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Cost trends also diverged between the two sectors: Cost pressures for manufacturers eased to a six-month low, giving firms room to protect margins without passing costs on to customers.
While services firms saw input costs edge up and pushed through their sharpest price increase to customers since March.
The concerns were also reflected in the inventory data, which pointed to still-rising stock levels even as sales came in below expectations. Stocks of finished goods rose for a second straight month, a moderate build linked to lower-than-expected sales.
The takeaway
With manufacturing decelerating for a third straight month and services doing the work to keep the headline number intact, we’d treat August’s composite reading as a sign of resilience rather than strength.
Looking ahead, with aggregate private-sector employment now growing at its fastest pace in 14 months, we’d expect the composite jobs picture to remain resilient even if manufacturing headcount stays soft into the next release.
