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India business activity extends robust growth streak in August, PMI shows
"India's flash composite PMI slipped slightly in August, though it remained significantly higher than the historical average," noted Pranjul Bhandari, chief India economist at HSBC.
An employee moves forging red hot steel inside a plant in West Bengal, India, April.26, 2024. / Reuters/Sahiba Chawdhary
BENGALURU (Reuters) - India's business activity extended its robust growth streak in August as a stronger services industry offset a slight slowing in manufacturing expansion, according to a survey that indicated price pressures also were easing.
Those findings suggest India will hold on to its title of fastest-growing major economy over coming quarters despite expectations of a slowdown in the global economy.
HSBC's flash India Composite Purchasing Managers' Index, compiled by S&P Global, dipped slightly to 60.5 in July from last month's final reading of 60.7, in line with a Reuters poll forecast.
August marked over three years of expansion, the longest such run since June 2013. The 50-level separates growth from contraction.
"India's flash composite PMI slipped slightly in August, though it remained significantly higher than the historical average," noted Pranjul Bhandari, chief India economist at HSBC.
"Although new order growth for the manufacturing sector slowed to the weakest since February, the pace of expansion remained sharp, indicating continued strong demand and favourable market conditions."
The flash services PMI index rose to 60.4 this month from 60.3 in July, while a preliminary manufacturing PMI showed strong growth, albeit slightly weaker than last month. It declined to 57.9 from 58.1.
Although growth in overall demand slowed to a three-month low in August, it remained robust. However, exports expanded at the slowest rate since April, indicating weak global demand.
Overall input costs increased at their weakest pace since February and output prices rose at a slower rate compared to last month.
Even so, prices charged on manufactured goods surged at the fastest in nearly 11 years.
India's retail inflation fell in July to a near five-year low, largely due to a high-base effect, suggesting the slower pace of price rises was temporary and the Reserve Bank of India needs to be cautious.
Concerns around inflation and competition led business confidence for the coming 12 months to wane in August.
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