Flash composite PMI rises to 4-mth high in Dec led by svcs

New Delhi : India's private sector output expanded at the fastest pace in four months in December, led by a jump in service sector activity, even as companies across both the manufacturing and the service sectors saw a faster upturn in new business intakes. The HSBC Flash India Composite Purchasing Managers' Output Index, compiled by S&P Global, rose to a four-month high of 60.7 in December from the final print of 58.6 in November.

The flash manufacturing PMI index rose to 57.4 in December from last month's final print of 56.5, while the services PMI increased to 60.8 from 58.4 in November. A PMI reading of more than 50 denotes expansion in activity, while a print below 50 is indicative of contraction.

 "Demand for Indian goods and services continued to improve in December, as seen by a sharp increase in new orders that was the most pronounced since July," S&P Global said in a release. "Service providers led the rise in sales, although growth strengthened across the two tracked sectors." 

 ""In this flash release, the small rise in headline manufacturing PMI in December was mainly driven by gains in current production, new orders and employment," Ines Lam, an economist at HSBC, said in the release. "The expansion in new domestic orders quickened, suggesting a pick-up in growth momentum in the economy," Lam noted. Improvement in sales in December was supported by international demand for Indian goods and services, S&P Global said. New export orders expanded at the quickest in five months in December, with manufacturing companies witnessing a faster increase than their services counterparts, S&P Global said.  As new business intakes continued to rise, firms hired extra staff to expand operating capacities. Firms recruited both permanent and temporary staff. The overall rate of growth climbed to a new series peak, amid record increases in both the manufacturing and service sectors, S&P Global said.