India’s Private Sector Hits 4-Month High in December: PMI Data

 New Delhi: Showing the resilience in India's economy with solid momentum, the India's private sector growth hit four-month high at the fastest pace in December, helping the economy on a positive note at the end of the year, underpinned by sturdier demand in both services and manufacturing along with a record jobs growth, a private survey showed on Monday.

As per the survey, the HSBC’s December flash India composite purchasing managers’ index (PMI), compiled by S&P Global, rose to 60.7 this month – matching August’s reading – after dropping to 58.6 in November, while services PMI business showed that the activity index: 60.8 as against November final 58.4. As the 50-level separates growth from contraction, it suggested a strong private sector expansion.

Commenting on the survey, Ines Lam, economist at HSBC said that in this flash release, the small rise in the headline manufacturing PMI in December was mainly driven by gains in current production, new orders and employment. “The expansion in new domestic orders quickened, suggesting a pick-up in growth momentum in the economy,” Lam said, adding that sustained increases in input costs have pushed manufacturers to continue to raise selling prices.

As per the survey, improving international demand for Indian goods and services continued to boost total sales, as seen by a sustained upturn in new export orders. “Moreover, December's expansion was marked and the quickest in five months. On this front, manufacturing companies recorded a faster increase than their services counterparts,” the survey report said.

“With new business remaining on an upward trend, private sector firms in India continued to expand operating capacities by recruiting extra staff. The overall rate of growth climbed to a new series peak, amid record increases in both the manufacturing and service sectors. Anecdotal evidence indicated that panellists hired a combination of permanent and temporary workers,” it added.