Business increased the most in January in the last four months, PMI figure reached 61

India's business activity grew at the fastest pace in four months in January on strong demand. This has been revealed in a private survey. The survey also showed input costs rising at the fastest rate since August.

The survey findings suggest that Asia's third-largest economy will remain the fastest-growing major economy at least in the near term. India's growth rate in the current financial year will be 6.9%. This information was given in a Reuters poll on Wednesday. HSBC's flash India composite Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 61.0 in January, its highest level since September.

This index remained above 50 points. It witnessed expansion for the 30th consecutive month. HSBC Chief India Economist Pranjal Bhandari said, "The economy grew at a brisk pace in January, driven by strength in manufacturing output as well as business services activity. New orders grew at a faster pace than a month earlier, and within that, “International orders remain stronger than before.”

Manufacturing PMI increased to 56.9 in January, from 54.9 in the previous month. Activity in the core services industry also grew at a faster rate and its PMI rose from 59.0 in December to 61.2 this month. This is mainly due to the strong expansion in demand.

Factory new orders rose at the fastest pace in four months while new business in the services sector increased at the fastest rate since July 2023. The recovery in demand boosted firms' expectations for the coming 12 months, particularly in manufacturing as future output reached its highest level in nine years.
 
Companies continued hiring for the 20th consecutive month, but job creation was higher in the services industry. Although overall output prices rose at a slower rate in January, input costs rose at the fastest pace since August 2023, suggesting price pressures may remain elevated. India's retail inflation hit a four-month high in December, and a Reuters poll has suggested the Reserve Bank of India will keep interest rates at their current level until at least July.