Combined manufacturing, services output rose at the fastest pace in nearly 14 years: Flash PMI data

India's manufacturing and services sectors show strong growth in April, with highest PMI scores in 14 years.

Combined output from India’s manufacturing and services sectors may have grown at the fastest pace in almost 14 years this month, with the services activity rising to a three-month high, as per the HSBC Flash Purchasing Managers’ Index (PMI) for April.

A spurt in international sales this month is reckoned to have bolstered new order inflows for manufacturing and services firms, with fresh export orders seen to have grown at the fastest pace since September 2014.

The Manufacturing sector Flash PMI stood at 59.1 in April, unchanged from March’s final reading for the index. The Services PMI, which stood at 61.2 in March, rose to 61.7 on the Flash PMI print for this month. A reading of 50 on the PMI indicates no change in activity levels. 

The Flash PMI scores for an ongoing month are based on responses from about 75% to 85% of 800 services and manufacturing players surveyed for the PMI that is available for each month in the first week of the subsequent month. “The composite output index rose at the fastest pace in nearly fourteen years, with the services PMI climbing further in April, led by a surge in new orders,” HSBC economists said in a note.

Manufacturing firms accelerated hiring this month while services players slowed down on new job creation, the Flash PMI signalled, even as both sectors reported a dip in input costs. While manufacturers raised output charges, improving their margins this month, Services firms saw operating margins worsen with labour costs spiking. 

“The orders-to-inventory ratio for manufacturers continue to remain above one, albeit moderated slightly in April. Overall business confidence ticked up in April and panellists expect further improvement in demand conditions over the coming year,” HSBC economists Pranjul Bhandari and Maitreyi Das said.