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India’s business activity grew at the fastest pace in eight months in March. This has increased the hope of remaining in the race of the world’s fastest growing major economies. The S&P Global HSBC Flash India Composite Purchasing Managers’ Index (PMI) stood at 60.6 in February, which increased to 61.3 in March. It has seen expansion for the 32nd consecutive month.
India’s business activity has reached its highest level in this financial year. HSBC Chief Economist Pranjul Bhandari said that the composite output index has increased rapidly due to the strongest manufacturing production in almost three and a half years. New orders have increased at a faster pace than last month. There has been improvement in both domestic and export orders.
Boom in manufacturing
The progress in the manufacturing sector has made an important contribution to the composite PMI index. Manufacturing PMI stood at 59.2 in March, which is the highest since February 2008. In the last month i.e. February it was 56.9. Demand for factory goods remains strong in India, which is preparing to become Asia’s third largest economy. Also, the fastest growth in new orders has been recorded in three years. Meanwhile, services activity also remained strong, however, the index declined slightly to 60.3 in March from 60.6 the previous month.
Export report fast growth
According to the report, the country’s total exports have grown at the fastest pace in seven months. The increase in business this month will be beneficial in the coming year also. Companies also increased hiring at the fastest pace since September, although overall pricing pressures have increased this month. Input costs among service providers rose at the fastest pace in seven months, while prices charged saw the fastest increase since July 2017. However, prices charged by manufacturers rose at the weakest pace in more than a year in March. This indicates that inflation levels may remain stable, giving the Reserve Bank of India less incentive to cut interest rates any time soon.