Pankaj Singh Bisht, Jadetimes Staff
Pankaj is a Jadetimes news reporter covering Business News.
India's private sector witnessed its strongest growth in six months during February 2025, as the services sector led the surge. The HSBC Flash India Composite Purchasing Managers' Index (PMI), which is compiled by S&P Global, increased to 60.6 from 57.7 in January, indicating economic momentum.
Services Sector Employment
The services sector proved to be the key driver of this expansion, with its PMI reaching 61.1 in February, the highest since March last year. This is a big jump from 56.5 in January, showing a strong expansion in services activity.
The following factors led to this boom:
New Business Orders: Services sector saw its highest new business inflow since six months ago. This improvement indicates increased domestic and international demand for services.
Employment Expansion: Service businesses responded to expanded demand by raising their staff to the highest expansion rate since 2005, when the survey began. Such a hiring frenzy indicates the confidence of the industry in long-term growth.
Manufacturing Sector Reports Steady Expansion
Though the manufacturing industry saw a moderation in growth, it continued to reflect good growth. The manufacturing PMI declined marginally to 57.1 in February from 57.7 in January but still well above the long-term mean of 54.1.
Major points are:
Output and Orders: There was a strong growth in output and new orders, though at a slower rate than in the last month.
International Demand: Export orders kept increasing, indicating India's relative price competitiveness in the world manufacturing sector.
Inflationary Trends and Pricing Dynamics
The survey captured conflicting trends between input costs and output prices:
Input Costs: There was a slowdown in input cost inflation, bringing some respite to businesses struggling with an increase in operating costs.
Output Prices: Conversely, companies increased their selling prices at a quicker pace, particularly in the services sector. This suggests that businesses are passing on higher costs to consumers, potentially impacting purchasing power.
Business Confidence and Economic Outlook
Business sentiment improved, with confidence reaching its highest level since November. Firms across both sectors expressed optimism about future growth prospects, supported by strong demand conditions and expansion plans.
The strong performance of the composite PMI reflects a positive direction for India's economy, reflecting resilience in the face of global uncertainties. Economists interpret this momentum as a good sign, which could lead to upward revisions in growth projections for the next quarters.
February 2025 was a milestone month for India's private sector as the services industry spearheaded a robust growth. The synergy of higher new business, record-breaking employment growth, and continued manufacturing activity presents an encouraging scenario for the country's economic landscape. Nevertheless, enterprises and policymakers should be cautious of inflationary forces and changes in the global economy to ensure that this growth momentum is sustained.
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