In January, India experienced a significant boost in business activity, reaching a four-month high, as both the manufacturing and services sectors demonstrated robust growth, according to a private sector survey unveiled on Wednesday.
HSBC's flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, surged to 61.0 in January, surpassing December’s final reading of 58.5 and marking the highest level since September 2023.
This latest reading maintains the index above the crucial 50-mark, indicating expansion rather than contraction, for the 30th consecutive month, showcasing India's consistent economic growth.
Service providers exhibited a more substantial increase in activity compared to manufacturers. However, growth accelerated in both sectors, positioning India as the world’s fastest-growing major economy, as outlined in the report.
The Manufacturing PMI rose to 56.9 in January, up from 54.9 in the previous month. Concurrently, the services industry experienced a sharper acceleration, with its PMI climbing to 61.2 from December’s 59.0.
Survey participants attributed this upturn to favorable economic conditions, robust demand, and ongoing enhancements in new business inflows. Aggregate sales registered a sharp increase in January, the fastest in six months. Both manufacturing and services firms reported accelerated rates of expansion in new orders.
The surge in total new business inflows was fueled by the most significant increase in international orders since October of the previous year.
However, the report also highlighted a noteworthy point—although overall output prices exhibited a slower rate of increase in January, input costs rose at the sharpest pace since August 2023. This reflects signs of mounting price pressures that could emerge in the future. The economic landscape indicates resilience and growth, but the potential impact of rising input costs remains a factor to monitor closely.
(With Agency Inputs)