India’s business activity reaches three-month high in November

Rising orders and export sales drive growth, but cost pressures increase

November 25, 2024

India's business activity climbed to 59.5 in November, a three-month high, as per the HSBC Flash India Composite PMI

Services experienced faster growth while manufacturing expanded despite a slight dip from October's figures

Employment in the service sector grew at its fastest pace since December 2005

Rising raw materials and food costs drove inflation to its highest level in nearly 12 years

India’s business activity surged in November, reaching a three-month high of 59.5 on the HSBC Flash India Composite Purchasing Managers Index (PMI), compiled by S&P Global. This marked an increase from October’s 59.1 and stayed above the long-term average, driven by rising new orders and export sales.

The services sector saw a notable uptick in activity, with its PMI climbing to 59.2, the highest in three months. While slightly down from October’s 57.5 to 57.3, manufacturing exceeded expectations, bolstered by robust expansion in new orders and international sales. Gains were reported across Asia, Europe, and the Americas.

Employment in the services sector reached a milestone, recording its fastest growth since December 2005. However, rising costs, particularly for raw materials like aluminium, cotton, leather, and rubber, alongside higher food prices and wages, increased inflationary pressures. This led to a sharp rise in selling prices, with inflation hitting its highest rate in nearly 12 years.

Despite these challenges, strong demand enabled businesses to transfer costs to clients while managing growing backlogs of work, which reached their steepest pace since May. The report highlights the resilience of India’s private sector in navigating cost pressures while capitalising on rising domestic and global demand.

Source: Economic Times

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