India’s economy recorded its strongest growth in four months, with the Composite PMI for December rising to 60.7, driven by robust performance in manufacturing and services sectors,
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India’s private sector ended 2024 on a robust footing, with the HSBC Flash India Composite Output Index rising to 60.7 in December, up from 58.6 in November. This marks the strongest expansion since August 2024, according to HSBC data compiled by S&P Global.
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The country’s private sector showed significant growth in both manufacturing and services, buoyed by a surge in new business inflows and notable job creation. The December figures highlight India’s economic resilience and steady recovery, ANI reports.
The HSBC Flash India Manufacturing PMI climbed to 57.4 in December from 56.5 in November, indicating improved business conditions. The uptick was driven by increases in production, new orders, and employment, supported by robust domestic demand. Manufacturers also ramped up input purchases to meet rising demand, and pre-production inventories expanded, though finished goods stocks fell as firms utilised inventory to address higher orders.
Meanwhile, the services sector remained a key driver of growth. The HSBC Flash India Services PMI Business Activity Index surged to 60.8 in December from 58.4 in November, reflecting sharp increases in sales and backlogs. Service providers benefitted from strong demand, both domestically and internationally, underlining the sector’s resilience.
December also saw a substantial rise in workforce expansion. Private sector firms added permanent and temporary staff at the fastest pace in the survey’s history. Backlogs of work rose at their sharpest rate since May 2024, underscoring the growing workload faced by businesses.
Demand for Indian goods and services reached its highest level since July, driven by sharp growth in domestic and international orders. New export orders, in particular, grew at the fastest rate in five months, with manufacturing leading in export performance.
According to Ines Lam, Economist at HSBC, “The modest rise in the manufacturing PMI in December was largely supported by gains in current production, new orders, and employment. Domestic orders saw an accelerated expansion, indicating improved growth momentum. At the same time, input cost pressures persisted, prompting manufacturers to raise selling prices.”
The output price index reached its highest level since February 2013, though firms raised prices at a slower pace than November’s near 12-year peak. Cost pressures from food, freight, and labour remained a challenge, ANI reports.
Despite these pressures, business optimism strengthened for the second consecutive month, reaching its highest point since September 2023. Positive demand conditions and stronger customer relationships bolstered confidence among manufacturers and service providers alike.
(With inputs from ANI)
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