Services sector growth remains strong in May; record increase in employment
India's Purchasing Managers' Index (PMI) for services rose to 58.8 in May from 58.7 in the previous month. Rate of expansion in new business and activity in May was little-changed from those seen in the prior three months.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Fibre2Fashion
10 hours ago
- Fibre2Fashion
US PMI hits 52 in May amid rising costs, trade uncertainty
Tariffs and shifting trade policy dominated the US manufacturing sector in May 2025, according to the latest S&P Global US Manufacturing Purchasing Managers' Index (PMI) report. The seasonally adjusted PMI rose to 52, up from 50.2 in March and April. Firms rushed to place orders and build inventories ahead of expected tariff-related cost hikes. Domestic demand drove a sharp rise in new orders. International sales, on the other hand, remained weak, with only a slight rebound after a sharp drop in April. US manufacturing gained momentum in May 2025, with the PMI rising to 52 amid tariff-driven stockpiling and rising domestic orders. Input inventories hit a record high, while production dipped slightly. Inflation eased but remained elevated due to tariff-related cost pass-through. Delivery delays worsened, and hiring rose marginally. Business confidence improved despite ongoing trade uncertainty. The accumulation of input inventories surged to a record level in the survey's 18-year history, underscoring industry efforts to build buffers against looming trade-related uncertainties. Stocks of finished goods also increased for the first time since November 2024. 'The rise in the PMI during May masks worrying developments under the hood of the US manufacturing economy. While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices," Chris Williamson, chief business economist at S&P Global Market Intelligence , said in a release. Despite stronger demand, production volumes were marginally reduced for the third consecutive month, as existing capacity proved sufficient to handle the inflow of new and pending orders. This was reflected in another decline in backlogs of work. Although price inflation eased slightly to a three-month low, it remained elevated, driven by suppliers passing on tariff-related costs. Factory gate prices also rose at their fastest pace since November 2022 as firms adjusted output charges to protect margins. Supply chain strain persisted, with delivery times lengthening to the greatest extent since October 2022. Vendors faced growing stock shortages, compounding delays and contributing to production headwinds. Employment levels saw a modest uptick – the first net gain in three months – as firms cautiously expanded labour capacity. However, hiring progress was hindered by difficulties in finding suitably skilled workers to fill open roles. Looking ahead, manufacturers expressed improved sentiment, with business confidence in May reaching a three-month high and slightly exceeding the survey's long-run average. 'Encouragingly, manufacturers regained some optimism in May after sentiment had been hit hard by tariff announcements in April, partly reflecting the pauses on new levies. However, uncertainty clearly remains elevated amid the fluid tariff environment, and factories have so far shown a reluctance to expand headcounts in the face of such volatility," Williamson said. Fibre2Fashion News Desk (HU)
New Indian Express
15 hours ago
- New Indian Express
MPC outcome: RBI seen poised for aggressive rate cut
CHENNAI: The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, concludes its three-day meeting today (June 6, 2025). Amid escalating global trade tensions stemming from new US tariffs imposed by President Donald Trump, expectations are mounting for an aggressive monetary easing by the RBI. Markets and analysts widely anticipate a 25 basis points (bps) cut, with some forecasting a jumbo 50 bps reduction to sustain domestic growth momentum and offset external headwinds. With recent cuts February and April this year by 25 bps each, the current REPO rate stands at 6%. These cuts have already prompted commercial banks to pass on benefits through reductions in External Benchmark-based Lending Rates (EBLRs) and Marginal Cost of Funds-based Lending Rates (MCLR), indicating effective policy transmission so far. Key Drivers Behind Rate Cut Expectations 1. Global Economic Uncertainty Trade Tensions: President Trump's renewed tariff actions have stoked fears of a global economic slowdown, weakening investor sentiment and external demand for Indian exports. Oil Prices & Global Demand: Volatility in crude oil markets due to geopolitical tensions may strain India's import bill and inflationary trajectory. 2. Domestic Growth Concerns India's Q1 FY26 GDP growth showed signs of deceleration due to weaker exports and subdued private consumption. Industrial production has softened, and the Purchasing Managers' Index (PMI) readings for both manufacturing and services have moderated slightly. 3. Benign Inflation Outlook Headline CPI inflation remains within the RBI's medium-term target range of 4%. Food inflation, although showing seasonal upticks, is largely under control. Core inflation remains muted due to weak demand. 4. Fiscal Policy Stance The Union Government's fiscal policy continues to be growth-supportive, but with limited space for large-scale stimulus, pressure shifts to the RBI for counter-cyclical support. Market Expectations The market expects another 25 bps cut as the most likely outcome the latest MPC meeting, aligning with RBI's cautious and data-dependent approach. However, there is a strong possibility of 50 bps cut if the RBI opts for preemptive, front-loaded easing to bolster sentiment and activity. Although unlikely, but not off the table, RBI may even opt for a status quo if the it views current liquidity and rate settings as adequate. Implications of a Rate Cut In the current scenario the impact of 25 bps cut will result in the rate of 5.75%, which can provide moderate boost to liquidity and credit demand The market watchers observe that the June 2025 MPC meeting is likely to result in at least a 25 bps repo rate cut, with a 50 bps cut a close contender given the increasing external risks and domestic growth slowdown. The decision will reflect the RBI's assessment of global trade dynamics, domestic inflation stability, and the effectiveness of past transmission. A forward-looking and accommodative stance is expected to continue, with future action contingent on evolving macroeconomic indicators and external shocks, said a banking sector analyst.
The Print
a day ago
- The Print
Rupee falls 26 paise to close at 85.87 against US dollar
At the interbank foreign exchange, the domestic unit opened at 85.69 and moved between the high of 85.69 and a low of 86.05 against the greenback during the day. Forex traders said the local unit remained under pressure on geopolitical tensions between Russia-Ukraine and elevated crude oil prices. Mumbai, Jun 4 (PTI) The rupee depreciated for the second consecutive session and settled for the day lower by 26 paise at 85.87 against the US dollar on Wednesday, largely driven by strong dollar demand from importers. The unit closed the session at 85.87 against the dollar, registering a loss of 26 paise from its previous close. On Tuesday, the rupee depreciated 22 paise to settle at 85.61 against the US dollar. The local unit registered the second consecutive session of fall and has lost 48 paise over the greenback. 'The Indian rupee extended its depreciation for a second consecutive day, emerging as the weakest performer among Asian currencies. This decline was driven by strong dollar demand from importers, a lack of intervention, and weaker-than-expected PMI figures,' said Dilip Parmar, Senior Research Analyst, HDFC Securities. On the domestic macroeconomic front, the Indian services growth broadly steadied in May and was underpinned by healthy demand conditions, new client wins and greater staffing capacity. The seasonally adjusted HSBC India Services PMI Business Activity Index was at 58.8 in May, marginally up from April's 58.7. Market participants are now keenly awaiting the outcome of the Reserve Bank of India's monetary policy meeting for direction trade. The Reserve Bank's rate-setting panel started its three-day brainstorming on monetary policy on Wednesday and the outcome is scheduled to be announced on June 6. Experts are of the view that the RBI may reduce the repo rate by 25 bps on Friday and another similar cut in the next policy. SBI research expects the central bank to go in for a 'jumbo' rate cut of 50 bps in June itself. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.15 per cent at 99.07. Brent crude, the global oil benchmark, rose 0.24 per cent to USD 65.79 per barrel in futures trade. 'Technically, the spot USDINR has broken out upwards, forming a bullish chart pattern. The bias for the pair has turned positive, suggesting a further appreciation towards 86.50 in the coming days, with support now established at 85.30,' Parmar added. In the domestic equity market, the 30-share BSE Sensex surged 260.74 points, or 0.32 per cent, to close at 80,998.25, while the Nifty rallied 77.70 points, or 0.32 per cent, to 24,620.20. Foreign institutional investors (FIIs) purchased equities worth Rs 1,076.18 crore on a net basis on Wednesday, according to exchange data. PTI DRR TRB This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
