Private sector activity in India fell to a 14-month low in January, showed the HSBC Flash Composite Purchasing Managers’ Index published on Friday by United States-based financial analytics firm S&P Global.

The index, which measures month-on-month changes in the combined output of the country’s manufacturing and service sectors, fell to a flash value of 57.9 in January from the final reading of 59.2 in December.

An index value of more than 50 indicates an expansion in economic activity as compared to the previous month. The value has remained above the 50-mark for three-and-a-half years, the longest continuous growth streak since mid-2013, Reuters reported.

“Indian private sector companies started 2025 with a slowdown in growth,” said S&P Global. “With the rise in new business intakes receding, aggregate output increased at the weakest pace since November 2023.”

The firm surveys about 400 companies each in the manufacturing and services sectors.

The manufacturing index was at a six-month high of 58.0 in January. It was 56.4 in December.

The services index fell from 59.3 in December to 56.8 in January, the lowest in 26 months.

Meanwhile, manufacturers and service providers indicated an increase in growth, which “underpinned the fastest expansion in aggregate international sales for six months”.

Job creation in manufacturing and services also reached an all-time high since comparable data became available in December 2005, S&P Global said.

The business confidence also improved from December, said the S&P Global report, “reflecting more buoyant forecasts among manufacturing companies who were at their most optimistic since May 2024”.

While the purchasing managers’ index is published at the beginning of every subsequent month, the flash data is calculated based on about 80% to 90% of the responses received for an early projection of the final numbers.

The indicator comes ahead of the Budget for the financial year 2025-’26, which will be presented by Union Finance Minister Nirmala Sitharaman on February 1.

On January 16, the World Bank forecast that India’s economic growth was projected to grow at a rate of 6.7% over the next two financial years.

In its “Global Economic Prospects” report, the World Bank said that India’s services sector is expected to enjoy sustained expansion. Manufacturing activities would strengthen, supported by government initiatives aimed at improving the business environment, it added.

The International Monetary Fund had said on January 10 that the Indian economy is likely to be “a little weaker” in 2025 despite steady global growth.

India’s gross domestic product growth is also projected to sharply fall to a four-year low of 6.4% in the financial year 2024-’25, from 8.2% in 2023-’24, according to the first advance estimates released by the National Statistics Office on January 7.

Also read: Why is India’s middle class so silent about the slowing economy?