Output growth across India's private sector regained growth in June with business activity increasing at quicker rates among manufacturing companies and services firms while hiring of workers shot up to an 18-year high, according to HSBC’s flash PMI data released on Friday.
There was also a substantial upturn in aggregate employment amid robust expansions in total new orders intakes and international sales, according to the data, compiled by S&P Global.
New orders gained growth momentum for both sectors, with a faster upturn among manufacturers as a result, capacity pressures became evident in June, leading firms to increase their staffing levels to the greatest extent in over 18 years.
The services Purchasing Managers’ Index (PMI) climbed to 60.4 in June 2024 from 60.2 in May, while the manufacturing purchasing managers’ index increased to 58.5 in June from 57.5 in the previous month.
India’s manufacturing activity had slipped to a three-month low of 57.5 in May, as intense heatwaves led to reduced working hours and impacted volumes.
Meanwhile, services sector growth had softened to a five-month low in May following stiff competition and price pressures amid a severe heatwave.
"The composite flash PMI ticked up in June, supported by rises in both the manufacturing and service sectors, with the former recording a faster pace of growth. New orders gained growth momentum for both sectors, with a faster upturn among manufacturers. Meanwhile, new export orders slowed slightly in June, although the rate of expansion was the second fastest since the beginning of the series," said Maitreyi Das, Global Economist at HSBC.
Input cost inflation eased slightly in June, but remained elevated with panellists citing increases in labour and material costs. The output price index suggests manufacturing firms were able to pass on higher costs to customers, the survey states.
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