India's business activity surged to its fastest expansion in four months in January, driven by robust demand, as per a private survey. The HSBC's preliminary India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, reached 61.0 in January, the highest since September and surpassing the December final reading of 58.5. This indicates expansion for the 30th consecutive month, with new orders, particularly from international sources, contributing to the positive trend.
The Manufacturing PMI rose to 56.9 in January from 54.9 the previous month, and the services industry also saw an acceleration in activity, with its PMI rising to 61.2 from 59.0 in December. Both sectors reported a surge in new orders, with manufacturing experiencing its quickest growth in four months. Consequently, firms' expectations for the next 12 months reached the highest level in over nine years, particularly in manufacturing.
Employment continued to rise for the 20th consecutive month, primarily in the services industry. While overall output prices increased at a slower rate in January, input costs saw the sharpest rise since August 2023, indicating potential ongoing pressure on prices.
These results suggest that India, the third-largest economy in Asia, is likely to maintain its position as the fastest-growing major economy in the near term. A recent Reuters poll projected a 6.9 percent growth for India in the current fiscal year, supporting the positive outlook for the country's economic performance.
(With Agency Inputs)