HSBC India Manufacturing PMI®
The HSBC India Manufacturing Purchasing Managers' Index (PMI) declined from 53.5 in July to 52.8 in August 2026, indicating the weakest improvement in the health of India's manufacturing sector in five years. The headline figure fell below its long-run average of 54.2, extending its decline for the third consecutive month. Data were collected from 6-24 August 2026 from a panel of approximately 400 manufacturers stratified by sector and company workforce size.
Output and new orders rose at their weakest rates since August 2021, with the output index falling to its lowest level in five years. The softer sales environment was reflected across two of the three industrial groups tracked, with consumer goods being the exception. Export sales continued to grow, with gains reported from markets including Australia, Germany, mainland China, Spain, Thailand, and the US, though the pace of international order growth eased from July.
Manufacturing employment edged into mild contraction for the first time in two-and-a-half years, though the rate of decline was only fractional. Companies reducing staffing levels cited lower business requirements. Input buying expanded for the sixty-second successive month but at the weakest rate during this period, while stocks of finished goods increased for the second consecutive month due to lower-than-expected sales.
Input cost pressures receded to a six-month low, with manufacturers facing moderate cost increases for materials including steel and transport. This allowed firms to limit increases in selling prices, with the rate of output charge inflation reaching its slowest pace in 45 months and remaining below its long-run trend. Only fewer than 7% of panelists reported hikes to selling charges.
Despite the softer performance, business expectations strengthened to their highest level since May, with approximately 16% of survey participants forecasting higher output over the coming 12 months while the remainder expected no change from present levels. However, confidence remained subdued by historical standards.