FX.co ★ India Composite PMI Slips to Over 4-Year Low

India’s HSBC Composite PMI eased to 54.3 in July from a final reading of 57.1 in June, flash estimates showed. This was the lowest level since March 2022 and highlighted the impact of ongoing tensions in the Middle East on overall business activity.

Growth in the services sector slowed sharply, even as manufacturing output picked up pace. New orders increased at the weakest rate in nearly four and a half years, weighed down by challenging market conditions, intense competition, and order cancellations.

Even so, export orders rose at the fastest pace since March, and employment expanded for a seventh consecutive month. Outstanding business declined for the first time in three months, mainly reflecting the clearance of backlogs in services.

On the price front, input cost inflation quickened, driven by higher fuel, labor, material, and transport expenses. In turn, output price inflation climbed to its highest level since April. Business confidence softened to a six-month low, with stronger optimism among manufacturers partly offset by a weaker outlook in the services sector.