India’s business activity grew at its fastest pace in three months in November, driven by a surge in the services sector and record job creation, according to a survey conducted by S&P Global. However, inflationary pressures dampened some of the optimism, with output inflation reaching its highest level in nearly 12 years.
The HSBC Flash India Composite Purchasing Managers’ Index (PMI) rose to 59.5 in November from 59.1 in October, marking 40 consecutive months of growth. A reading above 50 indicates expansion.
“Services saw a pick-up in growth, while the manufacturing sector managed to outperform expectations despite a marginal slowdown from its October final PMI reading,” said Pranjul Bhandari, chief India economist at HSBC, in an interview with Reuters.
The services PMI climbed to 59.2 from 58.5 in October, its highest level since August. Manufacturing, while still expanding, saw its PMI drop slightly to 57.3 from 57.5. Domestic demand, particularly in the services industry, offset slower manufacturing orders, while overseas demand for both sectors improved, with manufacturing exports reaching a four-month high.
Optimism about future business prospects reached its highest point since May, leading to record job creation, especially in the services sector. Employment rose at the fastest rate since the survey’s inception in December 2005, reflecting strong economic health and consumer spending potential.
However, rising input costs posed challenges, with inflationary pressures hitting a 15-month high. Businesses passed on these costs to customers, leading to the steepest output price inflation since February 2013. Despite this, the survey’s findings suggest robust economic growth for the ongoing festive quarter.
