 "Services PMI")
India’s private sector activity rose to an eight-month high in March, helped by a pick-up in growth at goods producers and buoyant demand that prompted aggregate sales rising sharply.
The HSBC Flash India Composite PMI (Purchasing Managers' Index) Output Index rose to 61.3 in March, compared with a downward revised figure of 60.6 in February, according to the third flash results released by the company on Thursday.
The index measuring the month-on-month change in the combined output of India's manufacturing and service sectors was inside growth territory for the 32nd consecutive month. This upturn was led by the manufacturing industry with the fastest expansions in factory orders and production in nearly three-and-a-half years.
“Service providers noted a sharp increase in business activity that was broadly similar to February, while manufacturers recorded the strongest upturn in production since October 2020. According to survey participants, efficiency gains and robust consumer appetite, alongside investment in technology and favourable market conditions, spurred sales. The pace of growth was substantial and stronger than that recorded in February,” said the survey.
Total order volumes received a boost from international sales as new export orders across the private sector expanded at the fastest pace in seven months, with quicker increases evident at both manufacturing firms and their services counterparts.
“Anecdotal evidence highlighted gains from Africa, Asia, Australia, Europe, the Middle East and the US. Consistently robust increases in new business continued to exert pressure on spare capacity at Indian private sector companies,” said the survey.
Pranjul Bhandari, chief India economist at HSBC, said the composite output index rose quickly in March as it was led by the strongest manufacturing output in nearly three-and-a-half years.
“New orders rose at a faster pace than in the previous month, and within that both domestic and export orders showed improved vigour. Input prices grew at a faster pace in March, and all the increase was not passed on to output prices, leading to some softening in composite margins,” said the survey.
Companies stepped up recruitment in March, but the pace of job creation was moderate.
“Employment increased at broadly similar rates in the manufacturing and service sectors. In addition to investing in greater workforce numbers, Indian manufacturers scaled up input purchasing in March. Buying levels rose at a substantial pace that was the strongest in nine months. This aided firms' restocking efforts, with input inventories expanding at the fastest rate since May 2023,” said the survey.
The Flash PMI records 75-85 per cent of the total 800 Purchasing Managers Index survey responses by services and manufacturing firms received each month. The final manufacturing PMI headline figure for the month of March will be released on April 2 and is projected to remain at 59.2. The services and composite PMI will be released on April 4.
