India's business activity surged to its highest level in seven months in February, driven by robust demand in both manufacturing and services sectors, as per a private economic survey released on Thursday.
The flash India Composite Purchasing Managers' Index (PMI) by HSBC, compiled by S&P Global, climbed to 61.5 this month from 61.2 in January, marking the 31st consecutive month above the 50-mark, indicating expansion.
Pranjul Bhandari, HSBC's chief India economist, highlighted the significant uptick in output from both manufacturers and service providers, reaching a seven-month high in February. Notably, new export orders saw a sharp rise, particularly for goods producers.
The manufacturing PMI for February reached 56.7, up from January's 56.5, hitting its highest level since September. Meanwhile, the preliminary services PMI rose to 62.0 from 61.8 in January, marking its highest level in the past seven months.
International orders showed a notable increase, reaching their quickest pace since September.
The survey's findings echo the Reserve Bank of India's bulletin released earlier in the week, which underscores the economy's sustained momentum from the first half of 2023-24. The bulletin anticipates a new wave of capital expenditure by the corporate sector to drive the next phase of growth.
The RBI's latest survey of households reveals a strengthening of consumer confidence in January 2024, particularly driven by optimism about the overall economic situation and employment conditions. Enterprise surveys also indicate robust business optimism.
High-frequency indicators suggest continued strong demand in January 2024.
E-way bills expanded by 13.2% in December 2023, while toll collections grew by 15.5% year-on-year in January 2024, albeit moderating from the previous month's record.
January witnessed a 23.3% year-on-year expansion in automobile sales, with two-wheeler sales experiencing double-digit growth. Retail tractor sales also surged to a seven-month high, recording a 21.2% year-on-year growth in January 2024. Vehicle registrations exhibited robust year-on-year growth as well.
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