India's private sector growth strengthens to 3-month high as composite PMI rises to 59.3 in Feb: HSBC

The HSBC Flash India PMI Composite Output Index, which measures the month-on-month change in the combined output of India's manufacturing and service sectors, indicated continued strong growth momentum across the private sector.

New Delhi: India's private sector activity strengthened further in February, with the HSBC Flash India PMI Composite Output Index rising to 59.3 from 58.4 in January, marking the strongest rate of expansion in three months, according to data released by HSBC.   The HSBC Flash India PMI Composite Output Index, which measures the month-on-month change in the combined output of India's manufacturing and service sectors, indicated continued strong growth momentum across the private sector. According to HSBC, the acceleration in growth was driven primarily by a quicker increase in factory production, while the services sector maintained a broadly similar pace of expansion as seen at the start of the 2026 calendar year.   It stated that a "combined output of India's manufacturing and service sectors rose from 58.4 in January to 59.3 in February, indicating the strongest rate of expansion for three months". The data showed that private sector companies in India reported faster increases in total new orders and international sales during February. This improvement in demand encouraged companies to recruit additional staff and increase output levels.   Businesses also expressed improved optimism toward growth prospects, reflecting confidence in sustained economic activity in the coming months.   However, the expansion was accompanied by rising inflationary pressures, as both input costs and selling prices increased at faster rates. Service providers registered a faster increase in output charges compared to manufacturers, reflecting stronger cost pressures in the services sector.   The preliminary PMI data also indicated a mild increase in capacity pressures among private sector firms. Outstanding business volumes rose for the third consecutive month in February and at the quickest pace since July 2025, although the overall rate of accumulation remained slight.   The manufacturing sector showed particularly strong performance, with the HSBC Flash India Manufacturing PMI rising to 57.5 in February from 55.4 in January. The reading remained well above the neutral threshold of 50.0 and its long-run average of 54.2, indicating strong expansion in manufacturing activity.   The HSBC Flash India Manufacturing PMI Output Index also increased significantly to 61.4 in February from 58.1 in January, reflecting faster growth in factory output.   Meanwhile, the HSBC Flash India Services PMI Business Activity Index stood at 58.4 in February, slightly lower than January's final reading of 58.5, but still indicating strong expansion in services activity.   Cost pressures remained elevated across the private sector. Service firms recorded the steepest rise in input prices in two-and-a-half years, while input price inflation for manufacturers remained at similar levels as in January. Overall, cost burdens across the private sector rose at the fastest pace in 15 months.   Companies reported higher expenses on chemicals, eggs, freight, labour, machinery, meat, metals, packaging materials, and vegetables.