New Delhi [India], August 21 : India's private sector economy expanded at the fastest pace since records began in December 2005, according to the HSBC Flash India PMI by S&P Global. The rise in August was powered by a surge in sales volumes and new orders, marking the quickest pace of business activity growth ever recorded.
The HSBC Flash India Composite Output Index, which tracks the combined performance of manufacturing and services, jumped to 65.2 in August from 61.1 in July. This four-point rise signaled a record acceleration in overall private sector business activity. Services outpaced manufacturing, with activity hitting a fresh survey high.
Sub-sector performance reflected broad-based strength. The HSBC Flash India Manufacturing PMI rose to 59.8 in August from 59.1 in July, its highest reading since January 2008. Meanwhile, the services sector led the rally, posting its strongest growth since the survey began.
Pranjul Bhandari, chief India economist at HSBC, highlighted the drivers of this performance: "The Services flash PMI touched an all-time high of 65.6, led by a sharp pick up in new business orders, both export and domestic. The Manufacturing flash PMI rose further, inching closer to the 60-mark, led by a smart rise in new domestic orders. Growth of new export orders, however, remained unchanged at July's levels. Margins improved as the rise in output prices was much faster than that for input costs."
Both manufacturers and service providers recorded accelerated growth in new orders, with export markets contributing significantly. The survey noted stronger inflows from Asia, the Middle East, Europe, and the United States, pushing export order growth to its fastest level since 2014.
Employment also saw a boost. August marked the continuation of workforce expansion for the 15th consecutive month, as service firms drove stronger job creation. Manufacturers reported only a slight slowdown. This momentum helped keep outstanding business volumes primarily in check.
On the pricing front, the survey revealed "intensification of inflationary pressures across India's private sector." Input costs climbed due to rising wages and raw material expenses, while firms raised output charges at the fastest pace since February 2013. Businesses pointed to strong demand as a key factor allowing them to pass on higher costs to customers.
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