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India: Manufacturing PMI improves while services eases

April 7, 2015

The HSBC manufacturing Purchasing Managers’ Index (PMI) rose from 51.2 in February to 52.1 in March. March’s result marked the first increase following two consecutive drops. The PMI is now further from the 50-threshold that separates expansion from contraction in business activity in the manufacturing sector.

According to HSBC, the increase was driven by a stronger increase in new orders. Strong growth was also recorded for output. In addition, employment levels remained relatively unchanged in March, while input costs rose at the fastest rate since August 2014. HSBC pointed out that, “[m]omentum is building in manufacturing as the sector begins to build up a head of steam. Stronger expansions of output, new orders and stocks of purchases all contributed to a higher PMI reading in March. To add to the good news, all three monitored market groups delivered faster growth, with consumer goods production continuing to lead the way.”

Meanwhile, the services PMI fell from 53.9 in February to 53.0 in March. According to HSBC, despite a deceleration in services activity, the result remains robust and provides signals that “much of the weakness seen in 2014 has been left behind.”

FocusEconomics Consensus Forecast panelists see fixed investment rising 5.8% in FY 2015/2016, which is down 0.3 percentage points from last month’s estimate. For FY 2016/2017, the panel expects fixed investment to increase 7.8%.


Author: Angela Bouzanis, Senior Economist

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India PMI March 2015

Note: HSBC India Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: HSBC and Markit.


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