A pick-up in growth at goods manufacturers and strong demand that led to a dramatic increase in aggregate sales helped propel India’s private sector activity to an eight-month high in March.
For the 32nd consecutive month, the index tracking the monthly change in the combined output of India’s manufacturing and service sectors was within the growth zone.
The manufacturing sector spearheaded this recovery, experiencing the fastest increases in factory orders and production in almost three and a half years. While manufacturers recorded the largest increase in production since October 2020, service providers reported a sharp increase in business activity that was essentially equal to February. Participants in the poll stated that favourable market conditions, technological investment, efficiency benefits, and strong consumer appetite all drove sales. Compared to February, there was a noticeable and greater increase rate.
The private sector’s new export orders grew at the quickest rate in seven months, helping to enhance total order volumes. Faster growth was seen at both manufacturing companies and their services counterparts.
Anecdotal information indicated that the US, Europe, Asia, Australia, and Africa had made gains. Strong growth in new business has kept the pressure on excess capacity at Indian private sector enterprises constant.
Compared to the previous month, new orders increased more quickly, and within those orders, both domestic and export orders showed increased vigour. Composite margins softened somewhat in March as input prices increased more quickly than output prices did not keep up with the increase.
The manufacturing and service sectors saw increases in employment at roughly comparable rates. Indian firms increased their purchases of inputs in March in addition to hiring more people. The rate of increase in buying levels was significant and the highest it had been in nine months.
As a result, input inventories expanded at the quickest rate since May 2023, supporting businesses’ efforts to restock.
Of the 800 Purchasing Managers Index survey responses that manufacturing and service companies submit each month, 75–85% are recorded by the Flash PMI. On April 2, the final manufacturing PMI headline number for March will be disclosed. It is anticipated to stay at 59.2. On April 4, the services and composite PMI will be made available.