The economic growth in India continued to strengthen in February, with further accelerations evident in both the manufacturing and service sectors. According to the HSBC Flash India PMI survey report, growth improved in both the manufacturing (five-month high) and services (seven-month high) economies, on the back of buoyant demand conditions, investment in technology, efficiency gains, expanded clientele and favorable sales developments. 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 - rose from a final reading of 61.2 in January to 61.5 in February. The latest figure was consistent with a sharp rate of expansion that was the strongest since mid-2023.
The report further said that new orders across India's private sector rose for the thirty-first successive month halfway through the final fiscal quarter. Equal to January, the rate of expansion was sharp and the joint-best in seven months. As was the case for output, services firms noted a stronger increase in sales than their manufacturing counterparts. International markets again made a positive contribution to companies' order books, as seen by the fastest expansion in new export work since last September. The upturn was led by goods producers. External sales were reportedly fuelled by stronger demand from clients based in Africa, Asia, Australia, Europe, the Americas and the Middle East.
On the price front, the rate of charge inflation for Indian goods and services receded to the weakest in a year as companies generally observed a lack of cost pressures. Input prices increased at the slowest pace in three-and-a-half years. Although outstanding business volumes continued to increase halfway through the final fiscal quarter, the pace of accumulation was slight and softer than in January. Rates of expansion were equal at goods producers and service providers.
