New Delhi, Aug 22 India’s private sector economy expanded at its fastest pace on record in August, supported by a surge in new orders and resilient demand, according to a report.
The India Composite Output Index jumped to 65.2 in August, up from 61.1 in July, HSBC said in its report.
The HSBC Flash India Composite Output Index measures combined activity in manufacturing and services.
August data marked the steepest pace of growth since the survey began in December 2005, according to the report.
According to the report, India’s private sector economy posted its sharpest expansion since survey data were first collected in December 2005 during August.
The acceleration was driven by one of the strongest increases in sales volumes on record, as businesses reported buoyant domestic and overseas demand.
The report highlighted that strong inflows of new work from Asia, the Middle East, Europe, and the United States drove the acceleration.
Meanwhile, the HSBC Flash India Manufacturing PMI rose to 59.8 in August from 59.1 in July, the highest since January 2008.
The index — which tracks new orders, output, employment, suppliers’ delivery times, and inventories — signalled a quicker improvement in factory conditions.
Meanwhile, the HSBC Flash India Services PMI Business Activity Index surged to an all-time high of 65.6, up sharply from 60.5 in July, pointing to rapid expansion in services activity, the report stated.
“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,” said Pranjul Bhandari, Chief India Economist at HSBC.
While export order growth held steady at July’s levels, margins improved as output prices increased more sharply than input costs, Bhandari added.
The strong PMI print comes as India seeks to accelerate its path towards becoming a $10 trillion economy in the coming decades.
The country’s growth strategy is increasingly centred on expanding manufacturing capacity, with sectors such as semiconductors, electronics, Electric Vehicles, renewable energy, and Defence emerging as key drivers, the report highlighted.
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