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Economic activity grows at fastest pace in eight months: HSBC Flash India PMI
Manufacturing leads with fastest expansion in factory orders and production in three-and-a-half years
Private sector output in March expanded at the fastest pace in eight months amid a pick-up in growth at manufacturing firms, HSBC Flash India purchasing manufacturers index (PMI) data showed.
The manufacturing industry led the upturn with the fastest expansions in factory orders and production in nearly three-and-a-half years, data showed.
“Led by the strongest manufacturing output in nearly three-and-a-half years, the composite output index rose quickly. New orders rose at a faster pace than in the previous month, and within that both domestic and export orders showed improved vigor,” Pranjul Bhandari, chief India economist at HSBC, said.
“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,” Bhandari added.
At 61.3, the headline index, which measures the month-on-month change in the combined output of India’s manufacturing and service sectors, was in growth territory for the 32nd consecutive month.
Rising from 60.6 in February, the latest figure indicated a sharp rate of expansion that was the strongest since July 2023.
Buoyant demand conditions fuelled growth, with aggregate sales rising at a sharp and accelerated pace.
Operating capacity pressures grew, as seen in the faster increases in backlogs, boosting job creation. Rising demand trends heightened inflationary pressures, with both input costs and output prices rising significantly.
Service providers saw a sharp rise in business activity, similar to February, while manufacturers witnessed the biggest production boost since October 2020, the survey said, adding that this growth was driven by efficiency improvements, strong consumer demand, technology investments, and favorable market conditions.
Overall, new business increased for the 32nd consecutive month in March, with a significant acceleration compared to February. Manufacturers led this growth, marking the quickest sales expansion in over three years, it added.
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