India October business growth hits 4-month high; hiring stalls, PMI shows

Bengaluru: India's business activity expanded at its fastest pace in four months in October as stronger orders drove a services-led pickup, but hiring almost stalled as companies met rising workloads with existing staff, a preliminary survey showed.

HSBC's flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 56.7 this month from September's final 55.9 and above a Reuters poll median forecast for 56.1. That suggests healthy growth as the 50-mark separates growth from contraction but it remains below this year's average.

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A services PMI rose to 56.2 from 55.2, driving the majority of the acceleration in private-sector output. Demand strengthened but employment was unchanged - ending a nine-month hiring streak.

Manufacturing output edged higher although slower recruitment pulled the sector's headline PMI down to 54.9 from 55.1.

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Companies said existing staffing was sufficient to handle workloads, while overall backlogs fell at the joint-fastest pace in nearly six-and-a-half years.

International demand provided support with overall export orders expanding at the fastest pace in six months. But the improvement was concentrated among goods producers as the growth in foreign requests for services weakened.

Price pressures offered relief across both sectors. Input-cost inflation eased to its lowest in almost a year and selling-price increases were the weakest since March last year.

Business confidence recovered to its highest since May but was below this year's average.