New Delhi: Signalling a strong momentum in the country’s economy, India’s growth in the private sector accelerated in April as both manufacturing and services activity rebounded after cooling last month despite elevated price pressures. The reason for the bounce-back is primarily because of recovery in domestic demand at the beginning of the new fiscal year, but uncertainty still remains due to the Middle East war, a private survey said on Thursday.
As per the survey, the overall growth improved significantly as the HSBC India composite purchasing managers’ index or PMI jumped to 58.3 in April from 57 in March, underscoring the broad-based expansion across the economy. “The manufacturing PMI rose to 55.9 in April, up from 53.9 in March, while the services activity climbed to 57.9 from 57.5 month‑on‑month,” the survey said.
Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC, said that private sector activity accelerated after easing in March amid disruptions linked to the Middle East conflict. “Manufacturing sector, however, led the upturn with faster growth than services in output and new orders,” Bhandari said.
“The survey indicated that firms are building buffer stocks to manage the uncertainties around the longevity of the supply-side shock. Finished goods and input inventories increased alongside a pick-up in purchasing volumes. Input cost pressures remained elevated, and firms passed through part of the increase via higher selling prices,” he added.
The survey also showed that export trends were mixed. “Manufacturers posted the fastest growth in export business in nine months, while services firms recorded the weakest increase in over a year, which respondents in the survey linked to the Middle East war. At the composite level, new export business rose at a softer pace than in March,” it noted.
As far as price pressure is concerned, the survey also noted that input cost inflation eased from March but was the second steepest in nearly three years, with firms citing higher prices for fuel and raw materials. “Companies continued to raise selling prices, though output price inflation remained below the pace of input cost increases,” the survey added.
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