Composite PMI rises to 13-mth high in May
New Delhi: The HSBC Flash India Composite Output Index – which measures the month-on-month change in the combined output of India's manufacturing and service sectors – on Thursday reported robust business activity in May in the country, climbing to a 13-month high of 61.2, compared with 59.7 in the previous month.
At 61.2 in May, the HSBC Index showcased a sharp rate of expansion in private sector activity. 'The increase was the most pronounced since April 2024. There was a mild loss of growth momentum in the manufacturing industry but service providers reported the fastest rise in output in 14 months,' according to a HSBC Flash India PMI note.
The HSBC Flash India Manufacturing PMI was little changed from April's reading of 58.2. At 58.3 in May, the latest figure was consistent with a sharp improvement in the health of the sector.Private sector growth in India moved up a gear during May, boosted by an acceleration in the service economy.
Strong influxes of new business, both from domestic and international markets, induced quicker expansions in business activity and employment. There was also an improvement in business confidence for the first time since January, said the HSBC.
'India's flash PMI indicates another month of strong economic performance. Growth in production and new orders among manufacturing firms remains robust, despite a marginal cooling from the rates of increase observed in April,' said Pranjul Bhandari, Chief India Economist at HSBC.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News18
2 days ago
- News18
India's Services Sector Booms in May; Job Creation Hits All-Time High Amid Strong Economic Tailwinds
Last Updated: IPOs worth Rs 1.4 lakh crore are in the pipeline for FY25, spanning sectors from infrastructure to consumer tech—pointing to growing investor appetite and corporate confidence India's services sector surged ahead in May this year, maintaining its powerful growth momentum and generating jobs at a record pace—signalling resilience in one of the country's key economic engines. According to the HSBC India Services Purchasing Managers' Index (PMI), business activity climbed to 58.8 in May from 58.7 in April, marking nearly three years of uninterrupted expansion. This steady growth was accompanied by the highest rate of job creation since the survey began in 2005, fuelled by robust domestic demand and a sharp rise in international orders. The sustained services growth adds to a series of economic indicators positioning India for a historic leap in global rankings. India has surpassed Japan to become the world's fourth-largest economy by nominal GDP and may surpass Germany by 2027, reflecting rising investor confidence and a resilient domestic market. May's services performance was underpinned by gains across customer-facing sectors like finance, business services, information technology, and real estate. New export orders saw their fastest rise in nearly 20 years, showcasing India's increasing integration with the global services economy. Companies reported improved demand conditions and confidence in future business prospects, prompting stronger hiring across the board. 'Activity in India's services sector remains resilient, with new business expanding at a sharp pace and firms hiring at the fastest rate on record," HSBC economist Maitreyi Das noted in the PMI report. India's broader macroeconomic environment is also helping drive growth. Morgan Stanley's global chief economist Seth Carpenter recently said India's outlook remains 'solid", supported by sustained capital formation, government infrastructure spending, and a structurally low inflation environment anchored by the Reserve Bank of India's policy stance. Business Standard reported that, adding to the momentum, the government has relaxed key provisions of the Special Economic Zones (SEZ) Act to encourage domestic production of semiconductors and electronics components—sectors deemed vital for technological self-sufficiency. The government's policy push has yielded tangible results at the grassroots level. India surpassed its procurement targets from Micro and Small Enterprises (MSEs) in FY24, fulfilling its mandate to source 25 per cent of public procurement from the sector—a key milestone for inclusive growth—the Economic Times reported. Simultaneously, foreign direct investment remains robust, with India attracting over $600 billion over the last decade, signalling long-term global confidence in its regulatory environment and economic direction. Capital markets are mirroring this optimism. The Financial Express reported that IPOs worth Rs 1.4 lakh crore are in the pipeline for FY25, spanning sectors from infrastructure to consumer tech—pointing to growing investor appetite and corporate confidence. With the services sector firing on all cylinders, supportive policies taking shape, and investor sentiment holding firm, India appears poised not only to meet but potentially exceed current growth projections. As the economy scales new heights, its success story is increasingly anchored in a services sector that continues to outperform, evolve, and employ at record levels—providing a solid foundation for India's next global leap. First Published: June 05, 2025, 13:09 IST
Time of India
2 days ago
- Time of India
HSBC plans venture debt fund for Indian startups
Mumbai: Hong Kong and Shanghai Banking Corp (HSBC), Europe's largest bank by assets, is contemplating launching a venture debt fund in India in what could be an extension of its fledgling loans business for startups, according to two persons directly aware of the matter. The plans, whenever they fruitify and if the regulator gives a go ahead, would make HSBC the first commercial bank to float a venture debt fund for startups in India. The exact timeline, the size, and the structure of the fund are yet to be firmed up, the sources said. "We hope that we can get it up and running in the next six months though no timeline has been set," one of them said. "The plans are still at an early stage and no targets have been set as yet, but it will complement the bank's existing startup financing business." A spokesperson for the London-based bank declined to comment. A venture debt fund enables startups to raise funds without diluting equity, often at a cheap price in early stages. The sources spoke on condition of anonymity because the plans are still private. A top industry official pointed out that HSBC is already offering venture lending although it does not have a specific venture debt fund yet. "They (HSBC) have been trying to do something for some time," the official said. The bank launched the venture debt business last year after it hired former Silicon Valley Bank (SVB) executive Pete Scott. HSBC took over the UK operations of SVB for a token amount of £1 in a fire sale led by the UK government and central bank to protect UK tech firms after the US bank collapsed in March 2023. It was the second-largest bank failure in US history with total assets of $209 billion, according to S&P Global. The proposed fund in India would be an extension of HSBC's startup banking practice that began in the country three years ago. In three years, it has allocated $600 million for various banking products tailored to the working capital needs of startups.
Mint
2 days ago
- Mint
What the cooling power demand in industrial India foretells
Demand for power in India's top six industrialized states flattened in April and cooled in May, pointing to a potential fall in factory production at the start of the new financial year. Data from the Grid Controller of India showed that total daily demand in May across Gujarat, Maharashtra, Andhra Pradesh, Uttar Pradesh, Tamil Nadu and Karnataka fell 5.7% from a year ago. As of 25 May, cumulative demand in these states stood at 59.58 billion units (BUs). In the same month, the HSBC manufacturing Purchasing Managers' Index hit a three-month low, as new orders and production slowed. In April, power demand across the same states was flat at over 75 BUs. While a break-up of industrial, consumer and household power consumption is not available yet, demand in industrialized states is seen as a proxy for overall industrial power consumption. Since industries account for roughly 45% of total power demand, weakness in these states could indicate a broader slowdown in industry. Industrial wheels slowing 'The major reason for the reduction in the industrial power demand has been the slowdown in economic activity, particularly in mining and manufacturing sectors, where the industrial output has remained weak in the months of March and April 2025," Mohammad Saif, partner, strategy and transactions at EY India, said. Saif noted that while manufacturing growth fell to 3.4% in April 2025 from 3.9% in April 2024, mining, another power guzzler, shrank 20 basis points compared to a growth of 6.8% in April 2024. Also read | India's power demand seen rising 7% this fiscal: Fitch India's overall power demand in May (25 days) fell 4% y-o-y to 148.71 BUs, and grew just 2.2% in April, compared to a 7% growth in March. To be sure, this year's summer has been less harsh than in the previous years, and early rains have dampened power demand across much of the country. Queries emailed to the ministries of power and finance remained unanswered. Ashok Sreenivas, group coordinator at Prayas Energy Group, an energy think tank, said that a tapering of macro indicators like the index of industrial production (IIP) may mean that growth in demand from industry has somewhat eased. In April, industrial output grew 2.7%, the slowest in eight months, down from 3% in March and 5.2% in April 2024. 'Industrial load is coming down," a top executive at one of India's largest green energy firms said on condition of anonymity. 'There has been a mismatch in the demand forecast." Yet another industry executive confirmed that industrial demand on power exchanges has been stagnant, with demand from households, via discoms, driving a large part of the trading activity. "From the perspective of commercial and industrial (C&I) and the overall demand, the market witnessed rapid demand and capacity growth post covid. So, an impact in the demand would be because of several factors. There are cycles. The current slowdown is likely to be a blip or a short-term phenomenon. We can see an uptick post monsoon or even mid-monsoon. From a longer term perspective, the C&I market and the energy demand as a whole is seen growing for the next few years," Rahul Mishra, head of C&I at BluPine Energy, a renewable energy platform. Cooling production In March, overall power production nationwide grew 6.3% in March against 8.6% a year earlier, and 1.1% in April against 10.2% a year earlier. However, others see this as a trend that will play out soon. Sachchidanand Shukla, group chief economist at Larsen & Toubro said that while power demand remains high in May because of rising temperatures, unseasonal rains this year and early onset of monsoon have moderated the demand. He also doesn't see the slowdown in the IIP as indication of a general weakness in demand conditions. 'Another repo rate cut expected from the RBI at the next monetary policy on 6 June, the record ₹2.69 trillion dividend to government announced already, and the above-normal monsoon are growth-supportive," said Shukla. 'The estimate of a 6.5% real GDP growth for the first quarter and an overall expansion of 6.5% in the full financial year are fair and reasonable." Read this | Data recap: IT costs, games bid, power demand India's GDP growth rate for the January-March quarter came in at 7.4%, backed by agriculture and construction, surpassing estimates. The strong quarterly showing–the fastest in the fiscal year–pushed overall growth in 2024-25 to 6.5%, according to data released by the National Statistics Office. Experts, however, are cautious about the outlook. 'Key indicators are showing signs of slowing down. However, the GDP growth number for Q4 FY25 came as a surprise against the expectation of 6.5-6.7%. It came on the upper side at 7.4%. Further indications would be required to see how the industrial and economic growth fares. It needs to be seen whether this sort of jump is a one-off case or a larger trend," said Pronab Sen, former chief statistician of India. Ratings agency Icra said last week that India's power demand in FY26 may grow 5-5.5%. Although this is higher than 4.2% in FY25, it would be slower than the 7-9% growth seen in the period FY22 to FY24, the period following the pandemic. The International Monetary Fund expects India's GDP growth in FY26 at 6.2%, down from 6.5% in FY25. Exchange view Amid a sudden fall in demand after rains and thunderstorms in May, power prices on the real time market (RTM) on the Indian Energy Exchange fell to zero on 25 May from an average of around ₹3 per unit. This was largely driven by fall in demand in the household sector. Currently, power exchanges comprise less than 10% of the overall power market. And this | India well-prepared to meet peak power demand: Singh 'In May, higher supply liquidity along with a 4% drop in electricity consumption kept RTM prices low. On 25 May, the average daily RTM price fell to as low as ₹1.53/unit. Participants leveraged these lower RTM prices to replace costlier power by procuring through exchanges, thereby optimizing overall power costs and driving up market volumes in the RTM segment," said Rohit Bajaj, joint managing director, Indian Energy Exchange. Rajib Mishra, professor at Management Development Institute (MDI) and former chairman and managing director of power trading company PTC India sees this as worrying, pointing out that for every 1% growth in GDP, power consumption needs to grow at 1.5%. 'If GDP is 6%, power consumption growth used to be 9%; but now it's been around 1:1 for the past few years," said Mishra, adding power demand growth has been averaging around 5-6% annually. To be sure, India's GDP growth in FY25 was 6.5%, and in FY24, 8.2%. The Central Electricity Authority (CEA) has projected a peak demand of 270 gigawatt (GW) this year, compared to a record 250 GW recorded on 30 May last year. Power sector experts said the usual peak expected in May-June may not be reached this year with monsoon rains anticipated to be higher than normal. However, the month of September may be critical, they added. And read | Mint Explainer: Why is India's power demand scaling new highs?
