Indian business activity rises to its highest level in fourteen years in April: PMI data
Business activity grew at the fastest pace in almost 14 years in April, driven by strong demand, a private report said Tuesday.
The HSBC Flash India PMI indicated positive job growth and a decline in input inflation, suggesting India is positioned to maintain its status as the fastest-growing major economy this year.
The flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global and HSBC, rose to 62.2 in April from the final reading of 61.8 in March. Since August 2021, a value above 50 has been observed, which separates expansion from contraction.
Pranjul Bhandari, chief India economist at HSBC, said strong performance in manufacturing and services sectors, driven by increased new orders, resulted in the highest composite manufacturing index since June 2010.
Bhandari said: “Service sector growth in particular accelerated further in April as new orders rose in both domestic and international markets. Meanwhile, both composite input and output prices moderated in April, although they remained robust. Production margins improved in April as companies were able to pass on higher prices to customers due to strong demand conditions. In fact, manufacturing industries have sharply increased their workforce and input purchasing activity. Overall future business prospects continued to improve in April, supported by robust demand.”
Services activity led the growth, with the index reaching a three-month high of 61.7, driven by accelerated new production, indicating robust demand. In addition, the manufacturing PMI remained strong in April at 59.1, with production and new orders for goods continuing to grow, albeit at a slightly slower pace than last month.
International demand remained strong during the month, contributing to the highest composite sub-index since its addition to the survey in September 2014. Strong sales have also strengthened the business outlook for the next twelve months, following a four-month low in March.
Efforts were made, especially in industry, to meet the rising demand for jobs. However, employment growth in service companies has slowed compared to March.
As input costs cooled for both goods producers and service providers, strong demand allowed companies to pass on expenses to their customers. Production margins improved in April as companies were able to pass on higher prices due to robust demand conditions.
First print: April 23, 2024 | 11:52 am IST