India's Business Growth Surges to Near 14-Year High in April 2024: PMI Data

India's business activity surged to a 14-year high in April 2024, driven by robust demand and job creation, underscoring its position as the world's fastest-growing major economy and promising a prosperous fiscal year ahead.

Trim Correspondents
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India's Business Growth Surges to Near 14-Year High in April 2024: PMI Data

India's Business Growth Surges to Near 14-Year High in April 2024: PMI Data

India's business activity expanded at the fastest pace in nearly 14 years in April 2024, according to the latest Purchasing Managers' Index (PMI) data. The HSBC Flash India Composite PMI Output Index climbed to 62.2 in April, up from 61.8 in March, indicating the strongest growth in aggregate business activity since June 2010.

The robust expansion was driven by buoyant demand from both domestic and external clients, with the manufacturing and service sectors witnessing increased new orders. The manufacturing PMI remained strong at 59.1 in April, albeit slightly softer than March's reading, while the service sector business activity increased to a three-month high of 61.7.

Why this matters: India's surging business growth underscores its position as one of the fastest-growing major economies, with the Reserve Bank of India projecting 7% GDP growth in FY25. The strong performance across key sectors bodes well for job creation and overall economic prosperity.

The survey data highlighted that rising demand supported further job creation at the start of the fiscal year. Goods producers raised their workforces to the greatest extent in nearly a year-and-a-half, while service providers also increased staffing. This uptick in employment is expected to have a positive impact on consumer spending and economic growth in the coming months.

While input costs and output prices moderated in April, they remained elevated. However, manufacturing firms saw an improvement in margins as they were able to pass on higher prices to customers amid strong demand conditions. This suggests that businesses are navigating inflationary pressures while maintaining profitability.

The PMI data also indicated a robust outlook for the future, with business confidence improving in April. "The survey showed business expectations for the year-ahead outlook for output improved in April, owing to projections of ongoing improvements in demand," noted Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.

India's strong economic performance in April 2024, as evidenced by the near 14-year high in business growth, reinforces its resilience and growth potential amidst global challenges. The expansion across manufacturing and service sectors, coupled with job creation and improved business confidence, sets the stage for a promising fiscal year ahead. As the world's fastest-growing major economy, India's robust business activity continues to grow and is poised to drive economic growth and attract global attention in the coming months.

Key Takeaways

  • India's business activity expanded at fastest pace in 14 years in April 2024.
  • Robust expansion driven by strong domestic and external demand across manufacturing and services.
  • Surge in business activity signals India's position as fastest-growing major economy, with 7% GDP growth.
  • Job creation increased, expected to boost consumer spending and economic growth.
  • Business confidence improved, setting stage for promising fiscal year ahead.