India’s October Business Activity Hits 4-Month High, But Hiring Stalls

India’s business activity accelerated to a four-month high in October 2026, but growth remained weaker than in the corresponding months of 2025 and 2024. The HSBC Flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 56.7 from 55.9 in September, but remained below 59.9 in October 2025 and 58.6 in October 2024. Meanwhile, hiring slowed to its weakest pace of 2026.

The latest reading extends India’s private-sector expansion streak to 63 consecutive months. However, a four-month high indicates the fastest growth since June, not a record level of economic activity. In October 2025, the composite PMI stood at 59.9, while October 2024 recorded 58.6, highlighting the moderation in momentum.

Employment trends also reveal a significant shift. In October 2024, job creation accelerated to its fastest pace since February 2006. By October 2025, employment was still growing, although at a moderate rate. In October 2026, services employment remained unchanged, ending a nine-month hiring streak, while manufacturing recruitment increased only marginally.

The employment component averaged 53.8 in the first ten months of 2025, compared with 52.5 during the same period in 2024. These figures suggest hiring momentum had improved before weakening in 2026, although the annual-period averages are not directly comparable with October’s individual reading.

The services sector drove the latest expansion, with its PMI rising to 56.2 from 55.2. Manufacturing output edged up to 57.6 from 57.5, but its headline PMI slipped to 54.9 from 55.1.

Export orders grew at their fastest pace in six months, while manufacturing export orders recorded their strongest increase since June 2025. Demand from the United States, the United Kingdom, West Asia and Bangladesh supported goods producers, although overseas services demand weakened.

Outstanding work declined at the joint-fastest pace in nearly six-and-a-half years. Manufacturers increased inventories ahead of anticipated festive demand, while input-cost inflation eased for a seventh consecutive month. Selling-price inflation also slowed.

Separately, a Jefferies analysis of more than 2,200 listed companies employing 10.4 million people found organised-sector employment grew just 1.8% in FY26, despite estimated salary increases of 9.4%.