Manufacturing boost propels business activity to 8-month high in March.

In March, India's private sector activity surged to an eight-month high, driven by robust growth in goods production and demand, leading to a notable increase in aggregate sales. According to HSBC's third flash results, the HSBC Flash India Composite PMI Output Index rose to 61.3 from a revised figure of 60.6 in February, marking its 32nd consecutive month in growth territory. Manufacturing saw the strongest expansion in factory orders and production since October 2020, while service providers reported a sharp increase in business activity. International sales, particularly from regions like Africa, Asia, Europe, and the US, bolstered total order volumes, with new export orders expanding faster in seven months.

HSBC's Chief India Economist, Ms. Pranjul Bhandari, noted the rapid rise in the composite output index, which was led by robust manufacturing output. Despite faster growth in new orders, input prices rose quicker, leading to some margin softening. Moderate job creation was observed, with employment increasing at similar rates in the manufacturing and service sectors. Indian manufacturers scaled up input purchasing substantially, aiding restocking efforts as input inventories expanded fastest since May 2023. Overall, the private sector's strong performance in March underscores robust domestic and international demand, alongside investment in technology and favourable market conditions.

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