India’s private sector output increased at the fastest pace in six months in February, fuelled by a quicker expansion in the services activity and a record job creation, according to a survey.
At 60.6 in February, HSBC’s flash India Composite Purchasing Managers’ Index (PMI) – a seasonally-adjusted index that measures the month-on-month change in the combined output of India’s manufacturing and service sectors – was the fastest growth in the private sector activity since August 2024.
“Rapid restocking around the world continues to lift new export orders. A healthy acceleration in orders and output is keeping firms optimistic about the future. Input prices eased while output prices rose at a faster pace, leading to improved margins, especially for goods producers,” said Pranjul Bhandari, chief India economist at HSBC.
Service providers noted a quicker increase than manufacturers, and the strongest in just under a year.
After the GDP rose by 5.4% in July-September on a year-on-year basis, the lowest in seven quarters, the growth has been estimated at 6.4% in FY25. The Reserve Bank of India’s internal models, based on high-frequency data, suggest the economic growth improving to 6.6% in the January-March quarter this year.
Job creation saw an upswing and the overall employment generation was at its fastest pace since the survey began in late 2005.
Businesses leveraged the positive demand by increasing prices even as input cost pressures eased. For the first time since October, the sub-index for output charges exceeded that of input prices. Cost pressures were more acute in the services sector compared to manufacturing, according to the survey.
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