India’s Private Sector Growth Hits 6-Month High in Feb, Job Creation at Record Levels

India’s private sector recorded its fastest expansion in six months in February, driven by a surge in services activity that allowed businesses to pass on rising input costs to customers. According to HSBC’s flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, the index jumped to 60.6 in February from 57.7 in January, signaling strong economic momentum.

The private sector growth offers a silver lining for Asia’s third-largest economy amid global uncertainties, including potential trade risks from U.S. policies. Despite these challenges, robust domestic demand helped sustain business activity, particularly in the services sector.

The services PMI surged to 61.1 this month, the highest since March last year, up from 56.5 in January. This strong growth offset a slight decline in the manufacturing PMI, which dipped to 57.1 from 57.7. While both sectors continued expanding, the pace of new orders for manufactured goods slowed slightly compared to the previous month. International demand followed a similar pattern.

Employment generation in February saw a significant boost, with job creation reaching its fastest pace since the survey began in late 2005. Businesses took advantage of strong demand by raising prices, even as input cost pressures eased. For the first time since October, the sub-index for output charges exceeded that of input prices, indicating improved pricing power for firms.

Cost pressures were more pronounced in the services sector than in manufacturing. Meanwhile, business confidence for the year ahead remained strong, reaching its highest level since November. This optimism was particularly evident among goods producers, suggesting continued resilience in India’s economic outlook.

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