Robust PMI figures signal a strong economic momentum
After a strong gross domestic product (GDP) growth estimate, we have further cause for optimism in the latest purchasing managers’ index readings for the manufacturing and service sectors. The HSBC India Services Purchasing Managers’ Index (PMI) clocked a robust 60.6 in February.
Though a slight decline from January’s 61.8, it is well above the 50 mark that separates expansion from contraction. Meanwhile, the PMI for the manufacturing sector, announced earlier, climbed to a five-month high of 56.9 in February.
Together, these indicate a strong economic momentum. As services account for most of India’s GDP, strength in this sector is crucial for the economy to stay on its high-growth path and accelerate.
Manufacturing has in the past underwhelmed, although its recent performance, exhibited not only in the PMI but also in GDP data, helps brighten the outlook further. At the same time, prices charged by service providers increased at their slowest pace in two years, adding to evidence of price pressures cooling.
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