New Delhi

Private sector output in India rose at the fastest pace in six months during February, driven by a quicker expansion in services activity, according to HSBC’s flash PMI data survey released on Friday.

The data also revealed stronger growth in aggregate sales, which placed upward pressure on operating capacities and led companies to increase hiring.

Price indices moved in opposite directions, with a slowdown in cost inflation contrasting with a faster increase in prices charged for goods and services.

The HSBC Flash India Composite Output Index, which tracks the month-on-month change in the combined output of India's manufacturing and service sectors, rose to 60.6 in February, up from a final reading of 57.7 in January. This marks the fastest rise in private sector activity since August 2024.

The rate of growth was also significantly higher than its long-run average. Service providers recorded a faster increase than manufacturers, with the fastest growth seen in nearly a year, according to the report.

Factory orders rose sharply, though at a softer pace than in January. This slowdown was largely attributed to competitive pressures. On the other hand, service providers experienced the steepest rise in new business intakes since August 2024. At the composite level, the growth rate improved to a six-month high, the report noted.

Looking ahead, private sector companies were strongly optimistic about output prospects. The overall level of business sentiment slightly exceeded that of January, reaching its highest point since November 2024.

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The improvement in confidence was particularly strong among goods producers. In manufacturing-only data, companies further increased buying levels in attempts to raise input inventories. While stocks of purchases grew in February, holdings of finished products continued to decline. In parallel, as has been the case for the past year, suppliers' delivery times shortened.

Although inflation remained moderate by historical standards, it retreated to a four-month low. Cost pressures were greater at services firms than at goods producers, with the former reporting higher outlays on food, the survey added.