Riding on positive demand, private sector continues to show impressive performance, as flash composite Purchasing Managers’ Index (PMI) surged to 14-year high to 62.2 in April, a survey result released by S&P Global on Tuesday showed. It was 61.8 in March
“Strong performance in both the manufacturing and service sectors, led by increased new orders, resulted in the highest composite output index since June 2010. In particular, services growth accelerated further in April as new orders in both domestic and international markets rose,” Pranjul Bhandari, chief India economist at HSBC said.
There was mixed news on job front as job growth was stronger in manufacturing but not so in services. The survey’s price measures showed slower rates of inflation for both aggregate input costs and output charges.
The index is compiled by S&P Global from responses to questionnaires sent to survey panels of around 400 manufacturers and 400 service providers. The panels are each stratified by detailed sector and company workforce size, based on contributions to GDP. The services sector is defined by S&P Global as consumer (excluding retail), transport.
The survey report mentioned that growth in India remained broad-based across the manufacturing and service sectors. The former saw the sharper rate of increase, albeit one that was softer than in March. In the service economy, business activity rose to the greatest extent in three months. Private sector sales expanded for the thirty-third successive month in April and at the quickest pace in just under 14 years. As was the case for output, a faster increase in the services economy compared with softer growth at goods producers (but they nevertheless registered the sharper upturn).
According to Bhandari, both composite input and output prices moderated in April, albeit remaining robust. Manufacturing margins improved in April as firms were able to pass on higher prices to customers due to strong demand conditions. In fact, manufacturing industries sharply increased their staffing levels and input buying activity. “Overall future business outlook improved further in April, buoyed by robust demand,” she said.