India's composite Output Index decline marginally in March, while private sector output grows strongly: HSBC PMI

New Delhi [India], March 24 : India's private sector continued its strong growth momentum in March, though at a slightly slower pace compared to February, according to the latest HSBC Flash India PMI data.
The HSBC Flash India Composite Output Index, which tracks the month-on-month change in the output of the country's manufacturing and service sectors, declined marginally from 58.8 in February to 58.6 in March.
Despite this slight dip, the latest reading remained well above its long-run average of 54.7, indicating a sharp expansion in business activity. The slowdown was primarily due to a softer increase in services activity, while factory production picked up significantly, growing at the fastest pace since July 2024.
It said "the combined output of India's manufacturing and service sectors - was down marginally from February's final reading of 58.8 to 58.6 in March".
As per the data the manufacturing sector showed strong improvement, with the HSBC Flash India Manufacturing PMI rising from 56.3 in February to 57.6 in March. This indicates a notable enhancement in operating conditions, aligning closely with the average for the 2024/25 fiscal year.
Among the five key components of the manufacturing index, three--output, new orders, and stocks of purchases--saw growth compared to the previous month.
Overall, India's private sector ended the 2024/25 fiscal year on a solid note, with sustained growth in new business orders and output. While the rate of expansion slowed from February, it remained well above long-term trends.
It also highlighted that outstanding business volumes continued to rise, leading to further job creation.
Price trends, however, showed mixed signals. Input costs increased at a sharp and accelerated rate, but the rate of inflation in output prices eased to its lowest level in over three years.
"India's manufacturing sector expanded at a faster pace in March, according to the flash PMI. The output index rose to its highest level since July 2024. Yet the margin squeeze on manufacturers intensified as input price inflation ticked up while factory gate prices rose at the weakest rate in a year. The moderation in new export orders growth was also noteworthy amid tariff announcements" said Pranjul Bhandari, Chief India Economist at HSBC.
The manufacturing emerged as the brighter sector in March, with sales and production rising at a faster pace than the services sector. This indicates a strong manufacturing push that could help sustain overall economic growth in the coming months.