India's Private Sector Growth Reaches 4-Month High in December: Report

India's private sector output growth accelerated to the fastest pace in four months during December, HSBC 'flash' PMI data compiled by S&P Global said.

Both manufacturing and services sectors registered acceleration as companies in both the segments welcomed a faster upturn in new business intakes, the report said.

According to Ines Lam, economist at HSBC: "The headline manufacturing PMI increased in December mainly driven by gains in current production, new orders and employment. The expansion in new domestic orders quickened, suggesting a pick-up in growth momentum in the economy.

Aggregate job creation climbed to a survey peak amid a faster increase in outstanding business volumes and optimistic expectations for output in 2025. Meanwhile, a moderation in cost pressures somewhat curbed inflation, according to the report.

Measuring the combined output of both India's manufacturing and service sectors, the HSBC Flash India Composite Output Index clocked 60.7 at the end of calendar 2024. That represented its sharpest gain in four months with the final reading standing at 58.6 during the preceding month. There was greater-than-ever progress being logged at the level of production with respect to both producers of goods and providers of service.

The HSBC Flash India Manufacturing PMI – a single-figure snapshot of factory business conditions calculated from measures of new orders, output, employment, supplier delivery times and stocks of purchases – recovered from November's two-month low of 56.5 to 57.4 in December, the report said. This pointed to an improvement in manufacturing sector conditions that was substantial and stronger than seen on average across the series' history.

Demand for Indian goods and services improved in December, as a sharp increase in new orders that was the most pronounced since July showed. Service providers led the rise in sales although growth strengthened across the two tracked sectors.