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www.projectstoday.com February 2025Economic Review 78.92 percent in November to 8.89 percent in December, reflecting the overall moderation in food prices.The final WPI for October 2024, based on the 2011-12 base year, was 156.7, with an inflation rate of 2,75 percent for all commodities. PMI BUSINESS ACTIVITY INDEXManufacturing SectorIndia%u2019s manufacturing sector started 2025 on a strong note, rebounding from a minor slowdown in December 2024. January saw a surge in new orders, driven by the highest export growth in nearly 14 years. This boosted production, increased purchasing activity, and led to record-high employment growth. Despite moderate input cost rises, manufacturers passed on some of the burden through higher selling prices, supported by strong demand. Business confidence also improved significantly.The HSBC India Manufacturing PMI rose to 57.7 in January from 56.4 in December, marking the fastest growth since July 2024. Manufacturers attributed the surge in new orders to robust domestic demand and a sharp rise in international sales. Export orders recorded their highest expansion in nearly 14 years, fueling the fastest production growth since October 2024.Encouraged by increasing sales and strong future prospects, firms expanded hiring at an unprecedented pace, with employment reaching its highest level in nearly two decades. Purchasing activity rose sharply, and firms accelerated stock-building efforts. Supplier performance improved, leading to the fastest inventory accumulation since October 2024.However, finished goods inventories declined for the second straight month as demand outpaced production, marking the sharpest stock depletion in nearly three years. Input costs rose due to higher freight, labor, and raw material expenses, but inflation reached its lowest level since February 2024. Selling prices increased at a slower pace but remained above the long-run average due to strong demand.Despite these trends, capacity pressures remained mild, as workforce expansions allowed firms to efficiently manage workloads. Outstanding business volumes saw only a slight rise, indicating effective demand management.Services SectorIndia%u2019s services sector saw a moderation in growth momentum in January after a strong end to 2024. New business inflows expanded at the slowest rate since November 2023, leading to a slight deceleration in business activity. However, growth remained historically strong, and firms continued to add jobs at a rapid pace. Business confidence stayed stable.The HSBC India Services PMI fell from 59.3 in December to 56.5 in January, the lowest since November 2022. Despite the dip, output growth remained solid, supported by strong demand, new business wins, and technological investments. Some firms, however, faced challenges due to a decline in customer numbers, and competition led to selective price reductions.International demand strengthened, with higher sales in Asia, Europe, the Middle East, and the USA, marking a fivemonth high in foreign orders. Rising capacity pressures led service providers to increase hiring, with employment growth accelerating to one of the fastest rates since 2005.Service firms remained optimistic about future growth. Cost pressures persisted due to rising wages and food prices, keeping inflation elevated but stable compared to December.Composite IndexIndia%u2019s private sector saw a slight loss of momentum in January as strong manufacturing growth was offset by softer expansion in services. The HSBC India Composite Output Index declined from 59.2 in December to 57.7 in January, marking a 14-month low but staying above the long-term average.Total private sector sales grew at the slowest pace since September 2024. While factory orders surged, services sector sales expanded at their weakest rate since November 2023, highlighting sectoral disparities.Inflation remained steady, as slower price hikes for manufactured goods were counterbalanced by rising service charges. Despite the moderation in services, India%u2019s private sector remained resilient, supported by strong manufacturing demand, employment growth, and expanding international sales.