Business activity in India at 14-year high: PMI Data

Manufacturing PMI: Business activity in India is booming like never before, hitting its highest level in nearly 14 years this month. A survey released on Tuesday revealed that demand is robust, leading to positive job growth and easing input inflation.

The HSBC flash India Composite Purchasing Managers' Index, compiled by S&P Global, soared to 62.2 this month, up from March's final reading of 61.8. This suggests that India is well-positioned to maintain its status as the fastest-growing major economy this year.

Both the manufacturing and service sectors are performing exceptionally well, driven by increased new orders. The composite output index reached its highest level since June 2010, thanks to stellar performance across the board.

The services sector, in particular, saw a significant uptick in new business, propelling the index to a three-month high. Meanwhile, manufacturing remained strong, with both output and new orders growing robustly, albeit slightly slower than the previous month.

International demand for Indian goods and services remained solid, contributing to the highest composite sub-index since its addition to the survey in September 2014. This strong performance has bolstered the business outlook for the next 12 months.

Efforts to meet rising demand have supported job growth, especially in manufacturing, where it increased at the fastest pace in one-and-a-half years. However, employment generation in the services sector was slower compared to March.

Despite cooling input costs, demand strength enabled businesses to pass on expenses to customers, resulting in improved manufacturing margins. However, inflation may not ease fast enough for the Reserve Bank of India to consider rate cuts anytime soon.

With Reuters Input