new delhi, Feb. 21 -- India's combined manufacturing and services output expanded at the fastest pace in three months in February, driven by stronger factory production and resilient demand, S&P Global said on Friday, citing the latest reading of its HSBC Flash India PMI composite output index. The seasonally adjusted composite output index rose to 59.3 in February from 58.4 in January, signalling the strongest rate of expansion since November. A reading above 50 indicates growth over the previous month. The headline composite figure is a weighted average of the manufacturing output index and the services business activity index. The indices range between 0 and 100, with readings above 50 signalling expansion and those below 50 indicating contraction. The indices are then seasonally adjusted. The acceleration in February was driven by a quicker upturn in factory production, while services activity growth remained broadly similar to levels seen at the start of calendar year 2026, S&P Global said. Mirroring the output trend, aggregate new orders increased at the fastest pace since last November. Survey participants from panels of around 400 manufacturers and 400 service providers attributed the growth to demand strength, local tourism and marketing efforts. Goods producers signalled a stronger rise in total sales than services firms, and one that was the quickest in four months, as the latter saw growth retreat to a 13-month low. "The manufacturing industry strengthened in February, supported by robust growth in output and new domestic orders. That said, growth of new export orders slowed. Conversely, services saw a notable acceleration in new export business, while its domestic orders moderated," said Pranjul Bhandari, chief India economist at HSBC. "Both manufacturers and service providers were optimistic about the future, despite rising inflationary pressures," said Bhandari. Data showed a mild pick-up in capacity pressures across India's private sector. Outstanding business volumes rose for the third straight month and at the quickest pace since July 2025, though the rate of accumulation remained slight, S&P Global said. With backlogs rising broadly, employment increased across manufacturing and services. Hiring remained modest but accelerated in both sectors. At the composite level, job creation strengthened to a three-month high, said S&P Global. Manufacturers also stepped up purchasing activity, with input buying rising at a four-month high. Supplier performance continued to improve, extending a two-year streak of timely deliveries. Improved vendor performance enabled firms to build stocks of raw materials and semi-finished goods. Reflecting the strength in goods production, the HSBC Flash India Manufacturing PMI climbed to a four-month high of 57.5 in February from 55.4 in January. The reading was comfortably above the neutral 50 mark and its long-run average of 54.2. Business confidence strengthened across both sectors, with firms collectively at their most optimistic about year-ahead activity in exactly one year. Respondents expect investment and marketing efforts to support growth. In tandem with rising cost pressures, companies in India lifted their selling prices during February, S&P Global said....