NEW DELHI: The growth rate in India’s business activity accelerated to a 7-month high in February driven by a strong demand for both manufacturing and services, according to a private economic survey released on Thursday.
India’s private sector activity rose to a seven-month high of 61.5 in February compared with 61.2 in the previous month owing to a faster expansion in the order books and a slower increase in input prices, according to a private survey released Thursday.
“Encouragingly, new export orders rose sharply, particularly for goods producers. Input prices rose at the slowest pace in three-and-a-half years. Producers were able to do both – lower the rate of increase in output prices and improve margins,” said Pranjul Bhandari, chief India economist, HSBC.
The HSBC Flash India Composite PMI Output Index indicated higher growth for both manufacturing and service sector firms, with manufacturing activity at a five-month high and services activity recording a seven-month peak.
“Survey participants attributed the upturn to buoyant demand conditions, investment in technology, efficiency gains, expanded clientele and favourable sales developments,” the report noted.
The Flash PMI records 75-85% of the 800 Purchasing Managers Index survey responses by services and manufacturing firms. The final manufacturing PMI will be released on March 1, and the services and composite PMI on March 5.
“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 report stated. Firms recorded higher sales from Africa, Asia, Australia, Europe, the Americas and the Middle East. Muted global commodity prices have provided support to companies by keeping wholesale prices contained.
Wholesale inflation eased to 0.27% in January because of easing prices of manufactured and food products. Consumer inflation also cooled to a three-month low in February on the back of declining food prices and easing core inflation, which fell to 3.3%. On the jobs front, payroll numbers were unchanged in February compared with the previous month despite firms experiencing higher orders.
There was some debt to business confidence, as it slipped from four-month high witnessed last month.
“Positive sentiment was pinned on hopes that market conditions will remain favourable, thereby boosting demand for goods and services and subsequently supporting economic output,” it said.
Source: The Economic Times
