The health of the Indian private sector economy improved substantially in January, as a sharper upturn in new work intakes fuelled output growth. The first ever HSBC Flash India PMI data showed that operating capacities remained under pressure, encouraging firms to hire additional workers. Another factor that underpinned job creation was a pick-up in business confidence. The inaugural flash results also highlighted an intensification of cost pressures, but selling prices were raised to a smaller extent.
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 - was at 61.0 in January, inside expansion territory for the thirtieth successive month. Moreover, rising from 58.5 in December, the latest figure pointed to the sharpest rate of growth since September 2023. Service providers noted a stronger increase in activity than manufacturers, but growth accelerated in both cases.
As per the report, the rise in total new business inflows was supported by the most marked increase in international orders since last October. Higher sales were to clients based in Africa, Asia, Australia, Canada, Europe, the Americas and the Middle East. Goods producers again registered a quicker expansion in external orders than service providers. Amid ongoing improvements in new orders, the operating capacities of private sector firms in India remained under pressure at the start of the year.
