Private sector business activity rises to 14-month high in June: PMI data

Business Standard

3 hours ago

India's private sector output grew at its fastest pace in 14 months in June, helped by faster increases in total new business intakes and international sales, showed a private survey on Monday.
HSBC's flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 61, up from a downward revised figure of 59.3 in May. The index, which measures monthly change in the combined output of manufacturing and services, has been above the 50-mark that separates growth from contraction for the 47th consecutive month.
'Manufacturers led the upturn in business activity, though growth also picked up pace in the service economy. Rates of increase were at two- and ten-month highs, respectively. According to panellists, output was boosted by favourable demand trends, efficiency gains and tech investment,' said the survey.
The HSBC Flash India Manufacturing PMI rose to 58.4 in June from 57.6 in May. The latest figure – a weighted average of new orders, output, employment, suppliers' delivery times and stocks of purchases indices –signalled the best improvement in operating conditions since April 2024.
'New business placed with goods producers and service providers increased at the end of the first fiscal quarter, with the faster upturn among the former. At the composite level, the rate of expansion was the strongest seen since July 2024,' said the survey.
Pranjul Bhandari, chief India economist at HSBC, said the flash PMI for May indicates strong growth in June as new export orders continued to fuel private sector business activity, especially in manufacturing.
'Meanwhile, the combination of robust global demand and rising backlogs prompted manufacturers to increase hiring. Employment growth is also healthy in the services sector despite slightly weakening on a sequential basis from May to June. Finally, input and output prices continued to rise for both manufacturing and services firms, but rates of increase showed signs of softening,' added Bhandari.
Flash PMI records 75 per cent to 85 per cent of the 800 responses from services and manufacturing firms each month. The final manufacturing PMI figure for June will be released on July 1, while the services and composite PMI figures will be released on July 3.
'June data showed an intensification of capacity pressures among Indian companies. Outstanding business volumes rose at a modest pace that was faster than in May and a tick above its long-run average. Moreover, the current sequence of rising backlogs was extended to three-and-a-half years. Rates of accumulation were broadly similar among manufacturing firms and their services counterparts,' the survey read.
On the employment front, the survey noted that the combination of demand strength and rising backlogs prompted Indian companies to recruit additional staff in June as anecdotal evidence indicated that both full- and part-time employees were hired for permanent and temporary positions. The employment growth reached a series peak in the manufacturing industry, while service providers signalled a slower upturn in job creation than in May.