India’s Economic Activity Slowed in June, Flash PMI Shows

India's economic activity experienced a slowdown in June, according to a flash survey by HSBC Holdings Plc released on Tuesday. The HSBC India Composite Purchasing Managers' Index (PMI), which gauges private sector output, fell to 60.9 in June from 61.3 in May. This deceleration was attributed to increased cost pressures and softening demand impacting businesses across the country. The services sector, in particular, saw its growth rate ease, with the HSBC India Services PMI dropping to 60.1 in June from 61.2 in May. Despite the overall slowdown, new orders continued to rise, albeit at a slower pace, indicating persistent demand. However, companies reported a significant increase in input costs, with the input price index rising to 62.1 in June, the highest in 15 months, driven by higher prices for raw materials and wages. This rise in costs led to an increase in output prices, with the output price index climbing to 55.5 in June, suggesting that businesses are passing on some of the increased expenses to consumers. Employment levels remained broadly stable, with the employment index at 51.6 in June, indicating a slight expansion in hiring. Looking ahead, business confidence remained robust, with companies optimistic about future output, although concerns about cost pressures and demand sustainability persist.