HSBC Flash India PMI® Report for October 2026
The HSBC Flash India Composite PMI Output Index rose to 56.7 in October from 55.9 in September, indicating the fastest monthly expansion of business activity since June 2026, though remaining below the average seen across 2026. The services sector showed improved growth with the Business Activity Index at 56.2 (up from 55.2 in September), while manufacturing output remained strong at 57.6 (slightly up from 57.5). The headline Manufacturing PMI ticked down marginally to 54.9 from 55.1.
New order growth accelerated in October, supported by the fastest rise in new export business in six months, with particular strength noted from the US, UK, Middle East, and Bangladesh markets. Despite stronger output and new orders, employment growth slowed significantly to only a marginal pace, the slowest in the year-to-date. Services staffing levels remained unchanged, ending a nine-month sequence of job creation, while manufacturing saw slight workforce increases as companies reported sufficient staffing capacity.
Backlogs of work decreased modestly for the third time in four months, with the rate of depletion being the joint-strongest in six-and-a-half years (equal with August 2021) and among the sharpest since the global financial crisis. In the manufacturing sector, purchasing activity growth eased to the slowest pace since July 2021, yet stocks of purchases increased markedly to the largest degree in eight months. Stocks of finished goods rose at the sharpest rate on record as companies built inventories in response to greater new orders.
Inflationary pressures continued to ease significantly, with input cost inflation slowing for the seventh consecutive month to the lowest in almost a year. Both manufacturing and services sectors showed weaker input price rises, with higher steel and transportation costs mentioned as contributing factors. Output price inflation also eased to the slowest pace since March 2025, with manufacturing selling prices rising at the softest rate in almost four years.
Business confidence improved to the highest level since May 2026, though still below the 2026 average, with optimism strengthening across both manufacturing and services sectors. Companies remained optimistic about future business activity amid expectations that market conditions will continue to strengthen.