Manufacturing surge drives stronger growth in India?s private sector in April

India?s private sector saw stronger growth at the start of the new fiscal year, with both output and new orders rising faster in April after a slowdown in March. The HSBC Flash India PMI Composite Output Index increased from 57.0 to 58.3, signalling sharp expansion and remaining well above its long-term average.

The improvement was largely driven by manufacturing, where output and new orders rebounded strongly, with both indices rising by more than three points. The HSBC Flash India Manufacturing PMI also climbed from 53.9 to 55.9. Services activity continued to grow, but at a more moderate pace compared to manufacturing.

New business expanded at a historically strong rate, supported by better demand conditions, capacity expansion and increased investment in technology. Export trends were mixed, with manufacturing exports growing at their fastest pace in nine months, while services exports rose at their weakest rate in just over a year, partly due to the impact of the Middle East war.

Cost pressures remained high, driven by rising prices for fuel, gas, oil and raw materials such as chemicals, metals and food. Although input cost inflation eased slightly from March, it was still the second-highest in nearly three years. Companies continued to raise selling prices, though at a slower pace than input costs. Inflation pressures intensified in manufacturing but softened in services.

Employment growth picked up to a ten-month high, supported by business expansion and positive demand expectations. While overall confidence eased from March, it remained the second-highest level in nearly 18 months. Manufacturers also increased inventories, with finished goods rising at the fastest pace since May 2015.