India’s private sector economy expanded at its fastest pace on record in August, driven by a surge in new orders, according to HSBC’s flash Purchasing Managers’ Index (PMI) survey released Thursday.
The HSBC Flash India Composite Output Index, which tracks month-on-month changes across manufacturing and services, jumped to 65.2 in August from 61.1 in July, marking the sharpest expansion since the survey began in December 2005.
The acceleration in August reflected one of the strongest rises in sales volumes on record. Businesses reported robust demand across sectors, boosting overall activity. The flash PMI data, compiled by S&P Global, surveyed around 400 manufacturers and 400 service providers.
HSBC noted, “Both manufacturers and service providers saw new order intakes rise sharply, underpinning a near survey-record overall expansion.”
The HSBC Flash India Manufacturing PMI, a composite gauge of new orders, output, employment, supplier delivery times, and inventories, rose to 59.8 in August from 59.1 in July, signalling an improvement in factory conditions at the fastest pace since January 2008.
“Manufacturers experienced strong demand for Indian goods in August,” the survey stated. Firms reported heavier workloads from customers across Asia, the Middle East, Europe, and the United States.
The HSBC Flash India Services PMI Business Activity Index jumped to 65.6 in August from 60.5 in July, highlighting a sharp acceleration in service sector growth.
Pranjul Bhandari, Chief India Economist at HSBC, said, “The Services flash PMI reached an all-time high, led by a sharp pickup in new business orders, both domestic and export.”
She further added, “The Manufacturing flash PMI also rose further, driven by a smart rise in new domestic orders.”
The PMI survey showed accelerated job creation in August, with stronger hiring in services offsetting a slight slowdown in manufacturing. Companies reported minimal backlog accumulation due to sustained hiring efforts, even as output expanded.
The survey also highlighted rising inflationary pressures in India’s private sector, with output prices increasing faster than input costs.
Looking ahead, private sector companies expect continued growth over the next 12 months, with optimism reaching its highest level since March.
“Positive forecasts were underpinned by strong demand expectations,” HSBC noted.
India’s push to achieve a $10 trillion economy relies heavily on manufacturing, particularly in semiconductors, electronics, electric vehicles, renewables, and defence.
To support this, the government has ramped up capital investment in infrastructure, industrial capacity, and job creation.
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