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regular-article-logo Wednesday, 22 May 2024

Business activity rises to 14-year high backed by demand in manufacturing, service sectors

According to a survey released on Tuesday by HSBC and S&P Global, the flash India composite purchasing managers’ index (PMI) climbed to 62.2, up from 61.8 in March. Any reading above 50 indicates expansion in business activity

Our Special Correspondent New Delhi Published 24.04.24, 12:11 PM
Representational image

Representational image Sourced by the Telegraph

India’s business activity expanded at its fastest pace in nearly 14 years in April, fueled by robust demand across both manufacturing and service sectors, according to a survey released on Tuesday by HSBC and S&P Global.

The flash India composite purchasing managers’ index (PMI) climbed to 62.2, up from 61.8 in March. Any reading above 50 indicates expansion in business activity.

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Pranjul Bhandari, chief India economist at HSBC, attributed the strong performance to a surge in new orders. This led to the highest composite output index since June 2010, highlighting significant growth across sectors.

Bhandari said: “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 because of 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 services sector spearheaded the expansion, with its PMI reaching a three-month high of 61.7. The growth was driven by a significant increase in new domestic and international business, reflecting robust demand.

Manufacturing activity remained healthy at 59.1 in April though growth in output and new orders slowed slightly compared with March. Nonetheless, strong demand allowed manufacturers to pass on higher input costs to customers, leading to improved margins in April.

Manufacturing firms also ramped up staffing levels and input buying activity to meet rising demand. This, coupled with strong sales, bolstered the overall business outlook for the next 12 months, reversing a four-month low from March.

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