India's private sector production jumped at its quickest rate in six months in February, boosted by a sharp increase in service sector activity, HSBC's flash PMI data showed on Friday. The survey also reflected an increased overall sales level, which resulted in higher operation needs and urged companies to increase the number of employees.
Price trends were also mixed, as input cost inflation slowed even though companies increased the prices of goods and services at a faster rate.
The HSBC Flash India Composite Output Index, which measures month-to-month change in the combined production of manufacturing and services sectors, rose to 60.6 in February from 57.7 in January. This is the strongest expansion of private sector growth since August 2024 and still well above the long-term trend.
The services sector was ahead of manufacturing in terms of growth, posting its best performance in almost a year, according to the report.
While factory orders kept rising, the rate was marginally less than in January because of pressures from competitive markets. Conversely, service providers felt the sharpest increase in new business orders since August 2024. As a consequence, private sector growth as a whole reached a six-month high.
Looking forward, companies in the private sector were very optimistic about future production, and sentiment rose a little from January to be at its strongest level since November 2024. The highest levels of confidence were seen among manufacturing companies.
Meanwhile, manufacturers continued to boost purchasing activity to build input inventories. Although stocks of raw materials increased in February, finished goods inventories declined further. Supplier delivery times, which have been shortening consistently for the past year, followed the same trend this month.
Inflation pressures were still modest relative to history, falling to a four-month low. Nonetheless, cost pressures were stronger in the services industry than in manufacturing, with services providers citing more expensive food and other inputs, the survey added.
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