India's private sector growth accelerates in April
What's the story
India's private sector activity gained momentum in April, with a strong performance from the manufacturing sector. The HSBC Flash India Composite Purchasing Managers Index (PMI) rose to 58.3 in April, up from 57 in March. This was driven by capacity expansion, improved demand conditions, higher inflows of new work, and increased investment in technology. The composite PMI combines manufacturing and services indices with readings above 50 indicating expansion.
Sector performance
Manufacturing PMI rises to 55.9
The manufacturing PMI rose to 55.9 in April from 53.9 in March, indicating a strong expansion in output and new orders. The services PMI also improved marginally to 57.9 from 57.5, signaling steady growth but at a slower pace than the factory sector. "Manufacturing led the upturn, with faster growth in output and new orders," said Pranjul Bhandari, Chief India Economist at HSBC.
Business strategies
Cost pressures continued to mount
The survey also revealed that firms are building buffer stocks to manage uncertainties around the longevity of the supply-side shock. Inventories of finished goods and inputs increased alongside a rise in purchasing activity. However, cost pressures continued to mount in April due to higher prices of fuel, gas, oil, and raw materials. "Input cost pressures remained elevated, and firms passed through part of the increase via higher selling prices," said Bhandari.
Market trends
Employment growth picked up
New export orders grew at a slower rate than in March, with manufacturers seeing a nine-month high while services saw its slowest rise in over a year due to the conflict. Employment growth picked up, reaching a 10-month high in April. "Survey respondents suggested that hiring was driven by rising business needs, expansion plans and optimistic expectations for the year-ahead," the survey noted.