India: Private sector activity rises sharply in February
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit climbed to 57.6 in February from 56.3 in January, representing the highest reading in eight years. A reading above 50 indicates a rise in business activity since the previous month.
The services PMI hit 57.5 in February, up from 55.5 in January, representing the fastest increase in services output in over seven years. This latest reading was driven by a marked increase in new work orders, which contributed to a rise in total sales. Partly as a result of strong demand conditions, service businesses became more confident in February that output will increase in the year ahead. Less positively, however, job growth slowed to a three-month low. Regarding prices, input cost and output price inflation both slowed in February.
On the manufacturing side, the PMI dropped to 54.5 in February, down from 55.3 in January. The lower reading in February was primarily due to a moderation in business confidence about future output, as firms grew concerned about the possible negative impact of the global coronavirus outbreak on exports and supply chains. Moreover, hiring activity slowed to a three-month low. More positively, however, output growth remained close to January’s over seven-and-a-half year high in February, and new orders increased sharply. On the price front, input cost and output price inflation were both subdued in February.