India’s private sector continued to strengthen in April and the business activity expanded at its fastest in nearly 14 years this month, fuelled by positive demand trends, according to a survey released by S&P Global. Per the HSBC Flash India PMI data, the manufacturing industry led the latest upturn, as was the case in March, although softening growth at goods producers compared with accelerations at service providers.
The headline HSBC Flash India Composite PMI Output Index, a seasonally adjusted index that measures the month-on-month change in the combined output of India’s manufacturing and service sectors, reported a rise from 61.8 in March to 62.2 in April, indicating the fastest rate of increase in aggregate business activity since mid-2010.
Pranjul Bhandari, Chief India Economist at HSBC, said, “Strong performance in both the manufacturing and service sectors, led by increased new orders, resulted 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 higher prices to customers due to strong demand conditions. In fact, manufacturing industries sharply increased their staffing levels and input buying activity. Overall future business outlook improved further in April, buoyed by robust demand.”
The strong expansion, according to the data, was led by services activity which rose to a three-month high of 61.7 from 61.2 in March, on new businesses. Manufacturing PMI came in at 59.1 this month similar to March. Both output and new orders for goods continued to grow at a robust pace, albeit slightly slower than last month.
In line with the recent trend, international sales positively contributed to total order books. In fact, at the composite level, new export orders rose at the fastest rate since the series started in September 2014. On this front, services companies noted the quicker rate of expansion.
Despite persistently robust increases in new business, pressures on capacity remained mild in April. Orders pending completion among private sector companies in India rose for the twenty-eighth month in a row, but at a slight pace that was weaker than that recorded in March.
Efforts to meet rising demand and clear backlogs supported jobs growth, which was the most pronounced in manufacturing where it increased at the fastest pace in one-and-a-half years. While service providers took on extra staff at a marginal pace that was softer than in March, goods producers raised workforces to the greatest extent in nearly a year-and-a-half.
Per the findings of the survey, private sector sales expanded for the thirty-third successive month in April and at the quickest pace in just under 14 years. As was the case for output, a faster increase in the services economy compared with softer growth at goods producers (but they nevertheless registered the sharper upturn), said HSBC Flash India PMI report. Strong sales improved the business outlook for the coming 12 months from a four-month low in March, it added.