Private sector growth hits three-month high in Feb as new orders pick up

Companies recruit additional staff and scale up output as sales improve

India’s private sector output is in February is expected to have grown at its fastest pace in three months in February, as new orders and international sales picked up, according to data compiled by S&P Global on Friday.

 

HSBC’s flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 59.3 in February, up from a final reading of 58.4 in January. The index has been above 50, a mark that separates growth from contraction, for 55 months straight.

 

Flash PMI is an advance indication of the final Manufacturing, Services and Composite PMI data for a month; it is usually released a week before the final PMI indices are released. Flash PMI is typically based on around 90 per cent of total PMI survey responses received each month and all responses are used in the final release.

 

 

“Private sector companies in India welcomed quicker increases in total new orders and international sales during February, which prompted them to recruit additional staff and scale up output,” said the survey.

 

The HSBC Flash India Manufacturing PMI rose to 57.5 in February from 55.4 in January. The latest figure – a weighted average of new orders, output, employment, suppliers’ delivery times and stocks of purchases indices – rose to a four-month high after a dip from November through January.

 

The HSBC Flash India Services PMI Business Activity Index fell to 58.4 in February from 58.5 in January.

 

Factory production drove the composite reading up, as services growth was largely  similar to that registered at the start of the year.

 

“The manufacturing industry strengthened in February, supported by robust growth in output and new domestic orders. That said, the growth of new export orders slowed. Conversely, services saw a notable acceleration in new export business, while its domestic orders moderated,” said Pranjul Bhandari, chief India economist at HSBC.

 

S&P Global compiles Flash PMI data from responses to questionnaires sent to survey panels of around 400 manufacturers and 400 service providers. The final manufacturing PMI for January will be released on March 2, while the services and composite PMI figures will be released on March 4.

 

Both output and aggregate new orders rose at the fastest pace since November with survey participants attributing it to demand strength, local tourism, marketing efforts and rising client enquiries.

 

While manufacturing firms saw the quickest sales growth in four months, services firms had the slowest growth in 13 months.

 

“Dampening the upturn were competitive pressures and the offer of cheaper services elsewhere, qualitative data showed,” the survey said.

 

Service providers outperformed in exports, as international orders rose at the steepest rate since August 2025. Meanwhile, manufacturers observed the slowest increase in external sales for 16 months. At the composite level, February's expansion was the strongest since last September.

 

The pace of job creation strengthened to a three-month high in February, with the rate of expansion rising for both manufacturing and services firms.

 

“These improvements were accompanied by an intensification of inflationary pressures, with both input costs and selling charges rising at faster rates,” the survey said.

 

The aggregate rate of inflation accelerated to a six-month high and outpaced its long-run average.

 

“Both manufacturers and service providers were optimistic about the future, despite rising inflationary pressures,” Bhandari said.

 

Service providers registered a faster increase in output prices than manufacturers, with the former noting the steepest rise in two and a half years. This pulled up the inflation across the combined private sector as cost burdens rose to the greatest extent in 15 months.

 

“Panel members reported greater outlays on chemicals, eggs, freight, labour, machinery, meat, metals, packaging materials and vegetables,” said the survey.