Activity levels in India’s manufacturing sector mellowed in September, with factory output and sales growing at the slowest pace so far in 2024, and export orders rising at the mildest pace in 18 months, as per the survey-based HSBC India Manufacturing Purchasing Managers’ Index (PMI).

The seasonally adjusted PMI reading for September slipped to the lowest level since this January at 56.5, from 57.5 in August, marking the third straight month of decline in output and sales. A reading of over 50 on the index indicates an expansion in activity.

Just around 23% of the 400-odd Indian producers surveyed for the PMI expected output to grow in the year ahead, while the remaining firms predict no change, pulling down the overall level of business confidence to its lowest since April 2023.

Companies continued to hire, but at a milder pace, with some firms opting to slash part-time and temporary workers. “Input prices rose at a faster rate in September while factory gate price inflation eased, intensifying the compression on manufacturers’ margin. Weaker profit growth might have an impact on companies’ hiring demand, as the pace of employment growth slowed for a third month,” HSBC’s chief India economist Pranjul Bhandari averred.

Producers raised prices for customers but at the mildest pace in five months.