Boosted by export demand and new orders, manufacturing leads surge; hiring also hits a record high
New Delhi: Driven by a faster rise in total new business intakes, record export growth and international sales, India’s private sector’s growth output rose at its fastest pace in 14 months in June. Manufacturers, however, led the upturn in business activity, though growth also picked up pace in the service economy, a private survey showed on Monday.
As per HSBC’s flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, it rose to 61, up from a downward revised figure of 59.3 in May. “While manufacturing PMI output went up slightly to 61.5 from 60.3 in May and services PMI by 60.7 from 58.8 in the same period,” the survey showed.
The 50-mark separates growth from contraction and the latest data showed nearly four years of sustained expansion. The survey, however, showed that this expansion was driven by favourable demand as composite new orders grew at the fastest pace, while goods producers experienced a more pronounced upturn than services firms.
Commenting on the survey, Pranjul Bhandari, chief India economist at HSBC said that India’s flash PMI indicated strong growth in June. “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,” Bhandari said.
“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,” he added.
As per the survey, manufacturing employment growth reached a peak not seen since the series began over two decades ago. “Service providers also continued adding jobs at a solid pace, albeit slower than in May. Overall price pressures also eased slightly with input cost inflation softening, allowing firms to limit price hikes to remain competitive,” it said.
