Synopsis
In February, India's private sector output marked a six-month high, driven by an increase in services activity, according to HSBC's flash PMI survey. The data shows growth in sales and hiring, with contrasting trends in inflation costs.Key Takeaways
- Private sector output hit a six-month peak.
- Service sector expansion was a significant driver.
- Overall business sentiment improved from January.
- Manufacturers reported a rise in factory orders.
- Inflation moderated to a four-month low.
New Delhi, Feb 21 (NationPress) The output of the private sector in India witnessed its most significant growth in six months during February, driven by a more rapid expansion in services activity, as per the HSBC flash PMI survey released on Friday.
The report also highlighted a robust increase in total sales, which placed upward pressure on operational capacities and encouraged firms to enhance their hiring processes.
Price measurements exhibited contrasting trends, with a deceleration in cost inflation juxtaposed against a quicker rise in the prices charged for goods and services.
The HSBC Flash India Composite Output Index – reflecting the month-on-month variation in the combined output of India's manufacturing and services sectors – climbed to 60.6 in February, up from a final figure of 57.7 in January. This marks the most significant growth in private sector activity since August 2024.
The growth rate was notably above the long-term average. Service providers reported a more pronounced increase compared to manufacturers, with the fastest rate recorded in nearly a year, according to the findings.
Factory orders saw a significant rise, albeit at a slower rate than in January, often attributed to competitive pressures. Conversely, service providers experienced the steepest increase in new business intakes since August 2024. Overall, the growth rate at the composite level reached a six-month high, as stated in the report.
Looking forward, companies in the private sector expressed strong optimism regarding output prospects. The general business sentiment slightly improved compared to January, achieving its highest level since November 2024.
This boost in confidence predominantly stemmed from goods producers. Lastly, data focused solely on manufacturing indicated that companies continued to increase purchasing levels to build up input inventories. While purchase stocks rose in February, the holdings of finished products saw a further decline. Additionally, for the past year, supplier delivery times have been decreasing.
The inflation rate remained moderate by historical standards, retreating to a four-month low. Cost pressures were more pronounced among services firms than goods producers, with the former indicating increased expenditures on food, as per the survey.
