India's Manufacturing Grows While Services Slow Down in 2025: HSBC PMI Report
India's Economic Growth in 2025: A Mixed Bag
The latest HSBC PMI data, compiled by S&P Global, reveals a mixed start to 2025 for India's economy. While the manufacturing sector showed strong growth, the service sector experienced a slowdown. This led to a weaker overall growth rate for Indian private sector companies, marking the slowest pace since November 2023.
Manufacturing vs. Services
In January, the HSBC Flash India Composite Output Index fell from 59.2 in December to 57.9, indicating the weakest expansion rate in 14 months. Despite this, the index remained above its long-term average of 54.7. Manufacturing orders increased at the fastest rate in six months, while service sector growth was the slowest since November 2023.
Price and Export Trends
Prices for goods and services rose faster than in December due to increased cost pressures. However, exports showed a positive trend, with both manufacturers and service providers reporting stronger growth than in December, leading to the fastest expansion in international sales in six months.
Expert Insights
Pranjul Bhandari, Chief India Economist at HSBC, noted a potential weak spot in the domestic service sector but highlighted the growing momentum in export business for service providers.
About the HSBC Flash India PMI
The HSBC Flash India PMI is based on responses from around 400 manufacturers and 400 service providers. A reading above 50 indicates growth compared to the previous month, while below 50 indicates a decline. The data is seasonally adjusted to account for variations.
Doubts Revealed
HSBC PMI
HSBC is a big bank, and PMI stands for Purchasing Managers' Index. It's a report that tells us how well different parts of the economy, like factories and services, are doing.
Manufacturing Sector
This is the part of the economy where things are made in factories, like cars, clothes, and toys.
Service Sector
This part of the economy includes jobs where people provide services, like teaching, banking, or healthcare, instead of making physical products.
Composite Output Index
This is a number that combines how well both manufacturing and services are doing. A higher number means better performance.
Pranjul Bhandari
Pranjul Bhandari is an economist at HSBC who studies and talks about how the economy is doing.
Exports
Exports are goods or services that India sells to other countries. When exports grow, it means India is selling more to other countries.
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