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India's private sector regains momentum in June, job creation at 18-year high: HSBC Flash India PMI
Jun-21-2024

With business activity increasing at quicker rates among manufacturing firms and their services counterparts, The HSBC Flash India PMI data compiled by S&P Global showed that India's private sector regained some of the momentum lost in May in the month of June. It also showed a substantial upturn in aggregate employment amid robust expansions in total new orders intakes and international sales. Meanwhile, price pressures receded. The headline HSBC Flash India Composite Output Index – a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors – increased from 60.5 in May to 60.9 in June, highlighting a quicker rate of expansion that was substantial by historical standards and broadly aligned with the average over the past 12 months.

Manufacturers saw a quicker improvement in the overall health of the sector at the end of the first fiscal quarter, with the HSBC Flash India Manufacturing PMI - a single figure snapshot of factory business conditions calculated from measures of new orders, output, employment, supplier delivery times and stocks of purchases - rising from 57.5 in May to 58.5 in June. There were stronger contributions from all of its five sub-components. Total new orders rose sharply and to a greater extent than in May. Growth quickened at goods producers and service providers, with the faster upturn among the former. New export orders increased for the twenty-second successive month in June. Despite slowing since May, the rate of expansion was sharp and the second-fastest since the series became available in September 2014. 

The pace of job creation was marked and the fastest in over 18 years. Growth strengthened at both manufacturers and service providers, with the quicker upturn among the former. Input prices at the composite level continued to increase in June, with panellists citing higher labour and material (food, steel, electronics) costs. Although solid, the rate of inflation softened from May and was below its long-run average. Business confidence remained positive in June as private sector firms in India expect marketing efforts to bear fruit and positive demand momentum to be sustained.

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