In April, India’s private sector activity saw a boost, supported by favourable demand patterns that drove new business acquisitions and production levels. Both indicators of expansion maintained their swiftest pace in almost 14 years, as reported by HSBC in a survey released on Tuesday. The survey noted that the headline flash composite Purchasing Managers’ Index (PMI) increased to 62.2 in April, surpassing the upwardly revised figure of 61.8 recorded in March.
For the 33rd consecutive month, the index, which gauges the month-on-month (M-o-M) fluctuations in the collective output of both the manufacturing and service sectors, remained within the realm of growth. As in the prior month, the manufacturing sector spearheaded the recent upswing, albeit with a lesser magnitude of growth compared to the services sector.
The survey highlighted that global sales made a positive contribution to overall order books, with new export orders increasing at the fastest rate since the series began in September 2014. Services firms, in particular, observed a swifter pace of expansion in this regard. Reports suggested heightened sales to clients across Africa, Asia, Australia, the Americas, Europe, and West Asia.
Despite the continual and robust rise in new business, capacity pressures remained moderate in April. This was evidenced by the ongoing increase in pending orders among private Indian companies, marking the 28th consecutive month of growth, albeit at a slower pace than in March.
According to Pranjul Bhandari, HSBC’s Chief India Economist, the exceptional performance of both the manufacturing and services sectors, driven by a surge in new orders, culminated in the highest composite output index since June 2010.
In particular, services growth accelerated further in April as new orders in both domestic and international markets rose.
“Meanwhile, both composite input and output prices moderated in April, albeit remaining robust. Manufacturing margins improved in April as firms were able to pass on the higher prices to customers due to strong demand conditions.
Manufacturing industries sharply increased their staffing levels and input buying activity. Overall, future business outlook improved further in April, buoyed by robust demand,” he added.
Regarding employment, efforts to meet escalating demand and address backlogs provided further impetus to job creation. The survey highlighted that service providers expanded their workforce at a marginal pace, slightly slower than in March. However, goods producers increased their staffing levels to the highest extent in nearly a year and a half.
The Flash PMI aggregates 75-85% of the total 800 survey responses received monthly from both services and manufacturing firms. The final manufacturing PMI headline figure for April is scheduled for release on May 2, with an expected continuation at 59.1. The services and composite PMI will follow on May 6.
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