India’s private sector showed stronger momentum at the start of the new fiscal year. After slowing in March due to the Middle East war, both overall activity and new orders expanded at a faster pace in April. Growth was supported by better demand, capacity expansion, rising new work inflows, and increased tech investment.
The HSBC Flash India Composite PMI Output Index rose to 58.3 in April from 57.0 in March, indicating sharp growth above its long-term average. New orders also increased at a historically strong pace, signaling solid underlying demand across the economy.
Manufacturing led the recovery. The Manufacturing PMI Output Index jumped to 59.1 from 55.7, while the overall Manufacturing PMI rose to 55.9 from 53.9. In comparison, the Services PMI Business Activity Index saw a smaller rise to 57.9 from 57.5, showing relatively moderate growth.
Export trends remained mixed. Manufacturing exports recorded the fastest growth in nine months, while services exports slowed to their weakest pace in over a year, largely due to disruptions linked to the Middle East conflict. Overall export growth was softer than in March.
Inflation pressures stayed high but eased slightly from March levels. Input costs rose sharply due to higher fuel, gas, oil, and raw material prices including chemicals, food, metals, and transportation. The rate of input cost inflation was the second-highest in nearly three years, although output price increases were more moderate.
Employment improved further, with job creation reaching a 10-month high. Hiring was driven by stronger business demand, expansion plans, and positive outlooks. Manufacturing firms led the hiring trend, though services also saw steady job growth.
Business confidence remained strong despite a slight dip from March. Companies expect higher output over the next 12 months, supported by marketing efforts, rising enquiries, and pending project approvals. Firms are also building buffer stocks, with finished goods inventories rising for the first time in six months and input inventories extending a 58-month growth streak.
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