BENGALURU, April 23 - India’s private-sector expansion picked up at the start of the new fiscal year, with a notable bounce in manufacturing and a steady performance in services, a flash PMI compiled for HSBC by S&P Global showed.
The HSBC flash India Composite Purchasing Managers' Index (PMI) rose to 58.3 in April from March’s final reading of 57.0. The composite series has remained above the 50 threshold that separates growth from contraction for nearly five years, signalling continued expansion across the private sector.
Manufacturing led the improvement. The manufacturing PMI climbed to 55.9 in April from 53.9 in March, while the manufacturing output index jumped to 59.1 from 55.7. Services activity also strengthened, though the gain was more modest; the services business activity index inched up to 57.9 from 57.5. Firms across both sectors reported stronger demand, with overall new orders rising at a faster pace and staying historically strong.
Export performance was uneven by sector. Manufacturers registered the fastest expansion in export business in nine months, reflecting a recovery in overseas demand for goods. By contrast, services firms recorded their weakest rise in export work in more than a year, with respondents linking the softer services exports to the Middle East war. At the composite level, new export business increased at a softer pace than in March.
Price dynamics showed some moderation in input-cost pressures compared with March, but input inflation remained the second-steepest in nearly three years. Companies cited elevated prices for fuel and raw materials as the primary drivers of cost increases. Firms continued to raise their selling prices, although output price inflation trailed the pace of input-cost inflation.
Energy supply concerns were highlighted in the PMI commentary. India, described in the PMI report as the world’s second-largest liquefied petroleum gas importer, is facing a severe shortage as the war in the Middle East has effectively choked the Strait of Hormuz. In response, the government has prioritised household LPG supply over industrial requirements, a policy move that survey respondents warned could weigh on businesses dependent on gas for operations.
On the employment front, firms reported hiring at the quickest rate in 10 months. Despite the stronger activity and rising payrolls, overall business confidence slipped from March, reflecting lingering uncertainty. The International Monetary Fund was cited as recently pegging India’s growth at 6.5% while warning that inflationary risks could temper the high-octane expansion seen in recent years.
Data snapshot:
- Composite PMI: 58.3 in April (March final: 57.0)
- Manufacturing PMI: 55.9 in April (March: 53.9)
- Manufacturing output index: 59.1 in April (March: 55.7)
- Services business activity index: 57.9 in April (March: 57.5)