India's Private Sector Expanded At Record Pace in August
As per the survey, HSBC’s flash India Composite PMI, compiled by S&P Global, rose to 65.2 in August from 61.1 in July, which was the highest reading since the survey began in December 2005 and remained above the 50-mark that separates growth from contraction for the 49th month
New Delhi: India’s private sector activity expanded at the fastest pace on record in August, as the headline HSBC Flash India composite purchasing managers’ index (PMI) output index witnessed a significant jump over four points to 65.2 in the month. A historic surge in demand was led by the dominant services sector, which allowed firms to hike prices at the fastest clip in over 12 years, a private survey showed on Thursday.
As per the survey, HSBC’s flash India Composite PMI, compiled by S&P Global, rose to 65.2 in August from 61.1 in July, which was the highest reading since the survey began in December 2005 and remained above the 50-mark that separates growth from contraction for the 49th month.
“Services sector led growth, with its activity index soaring to a survey high of 65.6. The manufacturing sector also showed significant strength - its preliminary PMI rose to 59.8, its highest reading since January 2008,” the survey showed.
Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC said that the services flash PMI touched an all-time high of 65.6, led by a sharp pick up in new business orders, both export and domestic. “The manufacturing flash PMI rose further, inching closer to the 60-mark, led by a smart rise in new domestic orders,” Bhandari said.
While that boosted job creation, the survey also showed companies passing on increases in input costs to customers. The output price index increased to an over 12-year high of 55.8 from 53.5 in July. “Growth of new export orders, however, remained unchanged at July’s levels. Margins improved as the rise in output prices was much faster than that for input costs,” Bhandari said.
There was considerable strength in demand for Indian goods and services in August in both manufacturing and services sector. However, the sub-sector data in the survey revealed broad-based strength across India’s economy as growth in both the manufacturing and services output accelerated. “Services were the better performer of the two, with its expansion in business activity hitting a fresh survey high,” the survey said.
