Private sector activity soars to 14-month high in June
The flash composite purchasing managers index (PMI), released by HSBC India, rose to 61 in June, up from a downward revised figure of 59.3 in May. The index, which measures monthly changes in the combined output of manufacturing and services, has been above the 50-mark which separates growth from contraction for the 47th month on the trot, the bank said Monday.
Manufacturers led the upturn in business activity, though growth also picked up pace in the services economy. According to the participants of the survey, output was boosted by favourable demand trends, efficiency gains and tech investment.
'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, the chief economist at HSBC India, 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.
'A 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,' she said.
Flash PMI records 75-85% of the 800 responses from services and manufacturing firms each month.
'June data show an intensification of capacity pressures among 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,' she read.
On the employment front, the survey notes that the combination of demand strength and rising backlogs prompted 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. Employment growth reached a series peak in the manufacturing industry, while service providers signalled a slower upturn in job creation than in May.
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