According to S&P Global’s PMI statistics, India’s total business growth in April was over 14 years high, powered by strong demand

According to an S&P Global survey, the private sector in India grew stronger in April and business activity increased at the strongest rate in almost 14 years this month due to strong demand trends. As was the case in March, the manufacturing sector led the most recent recovery, according to the HSBC Flash India PMI data, but with slower growth at manufacturers of products than at service providers.

 

The month-to-month change in the combined output of India’s manufacturing and service sectors is measured by the seasonally adjusted HSBC Flash India Composite PMI Output Index, which rose from 61.8 in March to 62.2 in April. This represents the fastest rate of increase in overall business activity since mid-2010.

“Strong performance in both the manufacturing and service sectors, led by increased new orders, resulted in the highest composite output index since June 2010,” said HSBC Chief India Economist Pranjul Bhandari. Specifically, when new orders increased in both local and foreign markets in April, the expansion of services accelerated even more. Although they were still strong, the composite input and output prices in April decreased. Strong demand conditions allowed businesses to pass on higher prices to clients, which resulted in an improvement in manufacturing margins in April. In actuality, hiring and input purchasing activities in the manufacturing sector both grew significantly. April saw a significant improvement in the overall outlook for company, helped by strong demand.

The report indicates that services activity on new enterprises led the robust increase, rising to a three-month high of 61.7 from 61.2 in March. Like in March, the manufacturing PMI for this month was 59.1. Despite growing somewhat less quickly than in the previous month, both production and new orders for products kept up their strong growth.

International sales made a good contribution to overall order books, following the previous trend. Actually, since the series began in September 2014, new export orders have increased at the composite level at the quickest pace. Services firms saw a faster pace of growth on this front.

In April, capacity constraints persisted in being moderate despite consistently strong gains in new business. For the twenty-eighth consecutive month, private sector enterprises in India had an increase in orders awaiting completion; however, the rate of growth was somewhat slower than in March.

The fastest employment growth in 1.5 years occurred in manufacturing, where efforts to satisfy growing demand and reduce backlogs were key factors in the expansion of jobs. Product manufacturers increased workforces to the highest level in over a year and a half, while service providers added workers at a somewhat slower rate than in March.

According to survey results, private sector sales increased in April for the thirty-third consecutive month and at the fastest rate in less than 14 years. Similar to production, the HSBC Flash India PMI data indicated that the services economy was growing more quickly than the products sector, despite the fact that the latter had slower growth. From a four-month low in March, strong sales enhanced the company picture for the next 12 months, it said.