New Delhi, Jan 23 (.) India’s private sector activity strengthened in January, driven by a rise in new business and improved demand conditions, according to data released by S&P Global on Friday. The HSBC Flash India Composite Output Index, which tracks combined activity across manufacturing and services, rose to 59.5 in January from 57.8 in December.
While the reading signaled continued expansion, it pointed to a relatively slower pace of growth on a month-on-month basis. Manufacturing and services recorded broadly similar growth rates during the month. Faster growth in private sector output was largely supported by an increase in new orders, with companies citing stronger customer demand and effective marketing efforts.
Manufacturing firms reported a quicker rise in sales compared with service providers, although both sectors showed improvement. Hiring in India’s private sector picked up in January after remaining unchanged in December. The increase in employment was modest but aligned with long-term trends, as companies added mainly junior- and mid-level staff to better match workforce levels with business requirements.
Manufacturing activity showed particular strength. Firms increased both hiring and purchases of raw materials, with input buying rising faster than in December and indicating robust growth. Reflecting these conditions, the HSBC Flash India Manufacturing Purchasing Managers’ Index (PMI) climbed to 56.8 in January from 55.0 in December, marking the strongest improvement in operating conditions since October.
Input costs and prices charged by companies edged up slightly compared with the previous month, but overall inflation remained moderate. This suggested that price pressures were largely contained despite the pickup in growth. Companies reported passing on higher costs to customers to protect profit margins. Increased spending on inputs such as food items—including eggs, meat, and vegetables—along with fuel and steel, contributed to higher expenses.
Labour and transport costs also added to overall cost pressures. Looking ahead, private sector firms remained optimistic about growth prospects. Although confidence levels stayed below the long-term average, optimism rose to a three-month high. Businesses cited expectations of better efficiency, sustained demand, and increased marketing expenditure as key factors likely to support growth in the coming months.
. VK PPP .