MUMBAI: Private sector output grew at the fastest pace in four months, helping the economy end 2024 on a positive note boosted by strong demand from services and manufacturing sectors leading to record jobs creation. As per a private survey, the flash PMI rose to 60.7 in December, which matches the reading in August after falling to 58.6 in November.
The good news is a relief for the economy which had slumped to a seven-quarter low of 5.4% in the September quarter. The falling inflation is expected to spur demand among private sector companies.
As per the December flash composite purchasing managers’ index (PMI), compiled by S&P Global for British lender HSBC, rose to 60.7 in December, after dropping to 58.6 last month. A reading over 50 separates growth from contraction.
The index has been above 60 in all but three months of this year, something not seen since 2008 when the global financial crisis hit.
“The small rise in headline manufacturing PMI in December is driven by gains in production, new orders and employment,” said Ines Lam, an economist at HSBC.
“The expansion in new domestic orders quickened, suggesting a pick-up in growth momentum.”
A stronger rise in demand was reflected in PMI for dominant services sector which constitutes about 60% of the GDP and rose to a four-month high of 60.8 from 58.4 in November, while the index for manufacturing was 57.4, up from 56.5 last month.
Services providers led the rise in sales with the new business sub-index touching the highest since January. Improving global demand for goods and services boosted sales with the former recording a faster increase than the latter.
The final month reading has improved business outlook for 2025 and optimism rising to its highest since September 2023, prompting companies to ramp up hiring at the fastest pace since the survey began in late 2005.
Services providers led rise in sales
Services providers led the rise in sales with new business sub-index touching the highest since Jan. Improving global demand for goods and services boosted sales. The final month reading has improved business outlook for 2025 and optimism rising to its highest since Sept 2023