look news india
Mumbai: The current month saw the biggest growth in business activity in India in 14 years due to strong demand. A survey report released on Tuesday said that input costs have decreased and there has been a positive trend in employment.
HSBC's composite Purchasing Managers' Index (PMI) for the services and manufacturing sectors for India rose to 62.20 in March from 61.80 in April.
The high overall PMI indicates that India's economic activity is strengthening. The survey report said the increase in demand has led to an increase in new business resulting in increased production.
April's PMI is the highest since June 2010.
The advance estimate of PMI is based on the votes of 80 to 90 percent of the industries participating in the survey in the respective month. A PMI above 50 is considered an expansion in that area.
Apart from domestic demand, export orders also increased significantly, indicating export growth. New export orders are at the highest level since September 2014.
Raw material inflation eased in April but manufacturing costs remained above their long-term average. Survey participants also said it is possible to pass on the burden of increased production costs to consumers due to increased demand.
Companies are expected to increase their margins as the cost is passed on to consumers. The April preliminary PMI of the services sector is 61.70 while that of the manufacturing sector is 59.10. Manufacturing companies are struggling to meet demand, but job creation in the services sector has slowed compared to March. Demand is expected to remain high in the next 12 months as well.