By Anant Chandak
BENGALURU (Reuters) – Growth in India’s private sector accelerated at its fastest pace in six months in February due to a surge in services activity that enabled businesses to pass on rising input costs to customers, according to a survey that also showed job creation was at a record high.
Strong business growth offers a bright spot for Asia’s third-largest economy which is facing global risks such as potential tariffs from U.S. President Donald Trump sparking a wider trade war, likely dragging the rate of economic expansion to a four-year low this fiscal year.
HSBC’s flash India Composite Purchasing Managers’ Index, compiled by S&P Global, rose to 60.6 this month marking a significant jump from 57.7 in January.
The 50-mark separates expansion from contraction.
Growth was led by the dominant services sector with its index reaching 61.1 this month – the highest since March last year – from 56.5 in January. That offset a slight dip in a manufacturing PMI which fell to 57.1 from 57.7, though still indicating healthy expansion.
The strong performance in services was fueled by a surge in new business – a key gauge for demand – touching a six-month high. While new orders for manufactured goods also increased, it was at a tamer pace than last month. International demand followed similar patterns for both industries.
But job creation saw an upswing and overall employment generation was at its fastest pace since the survey began in late 2005.
Businesses leveraged the positive demand by increasing prices even as input cost pressures eased. For the first time since October, the sub-index for output charges exceeded that of input prices. Cost pressures were more acute in the services sector compared to manufacturing.
Meanwhile, business confidence for the coming year remained positive this month, edging up from January and reaching its highest point since November. The improved sentiment was particularly evident among goods producers.
(Reporting by Anant Chandak; Editing by Kim Coghill)
