India’s private sector output growth strengthened to its highest level in four months during December, according to the latest HSBC ‘flash’ PMI data compiled by S&P Global. 

The acceleration was reflected in both the manufacturing and service sectors, as companies across the two segments welcomed a faster upturn in new business intakes, the report said.

Ines Lam, Economist at HSBC, said: “The rise in the headline manufacturing PMI in December was mainly driven by gains in current production, new orders and employment. The expansion in new domestic orders quickened, suggesting a pick-up in growth momentum in the economy.”

Aggregate job creation climbed to a survey peak amid a faster increase in outstanding business volumes and optimistic expectations for output in 2025. Meanwhile, a moderation in cost pressures somewhat curbed inflation, according to the report.

The HSBC Flash India Composite Output Index, which measures the combined output of India’s manufacturing and service sectors, registered 60.7 at the end of the 2024 calendar year. Rising from a final reading of 58.6 in November, the latest reading highlighted the strongest growth rate for four months. There were quicker increases in output at both goods producers and service providers.

The HSBC Flash India Manufacturing PMI – a single-figure snapshot of factory business conditions calculated from measures of new orders, output, employment, supplier delivery times and stocks of purchases – recovered from November’s two-month low of 56.5 to 57.4 in December. This pointed to an improvement in manufacturing sector conditions that was substantial and stronger than seen on average across the series’ history, the report said.

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. Service providers led the rise in sales, although growth strengthened across the two tracked sectors.