Key Facts:
The Purchasing Managers’ Index (PMI) is a monthly economic indicator that tracks the direction of business trends in the manufacturing and services sectors.
PMI is a key indicator of a country’s economic health.
Prime Highlights:
Job Growth remained robust, with one of the sharpest increases in employment since records began in 2005.
New Business Inflows remained strong, particularly in the services sector, leading to a rise in backlogs of work.
Key Background:
India’s Composite Purchasing Managers’ Index (PMI) moderated to 58.8 in February 2025, a decrease from January’s 60.6, but remained above the 57.7 recorded in the previous month. This marks 43 consecutive months of expansion in the country’s private sector activity. Despite the easing of the composite index, services remained a key driver of growth, while the manufacturing sector experienced a decline, reaching its lowest level in 14 months.
The HSBC India Services PMI was revised upwards to 59.0 in February from the flash estimate of 61.6. This was a notable improvement from the 26-month low of 56.5 in January, underscoring a strong rebound in service sector activity. New business inflows continued to remain robust, supporting one of the most substantial rates of job growth since the inception of records in 2005. As a result, backlogs of work increased, with outstanding business rising at the fastest pace since May 2024.
Inflationary pressures showed signs of easing, with input cost inflation reaching a four-month low. However, output price inflation remained elevated, as businesses continued to pass on rising costs to consumers. Despite the reduction in cost pressures, business confidence declined, reaching a six-month low. In terms of overall economic activity, new orders rose sharply, driven largely by services, while employment growth remained near record highs. Although inflationary pressures softened compared to the previous month, the prices for both goods and services saw the most significant increase in three months. Overall, while the Indian economy is continuing its expansionary trend, the slowdown in manufacturing activity and the decline in business confidence signal potential challenges ahead.
