Private sector output highest since July 2010, highest job growth since 2006: PMI

S&P Global’s India Purchasing Managers’ Composite Index, a measure of the monthly change in the combined output of India’s manufacturing and services sectors, rose slightly to 61.7 in May from April’s reading of 61.5. This is the index’s 34th month above the 50 mark separating growth from decline. The reading comes after the services PMI rose to a four-month high of 61.4 from 60.8 in April and the manufacturing PMI fell to 58.4 from 58.8 in April.

The index showed the third-largest increase in private-sector output since July 2010. The May survey also showed the largest increase in the number of private-sector jobs since 2006, as well as a noticeable improvement in business confidence. However, the faster increase in production costs has resulted in higher prices of Indian goods and services.

“The composite PMI rose again in May, recording the third highest reading in nearly 14 years, accompanied by a sharp acceleration in the services sector. Although manufacturing sector growth slowed slightly in May, driven by a slowdown in new orders and production, output growth in the manufacturing industry continued to outpace growth in the service economy. Additionally, the latest data showed the strength of new export orders for both sectors, which grew at the fastest pace since the series began in September 2014. Level of optimism. throughout the coming year reached the highest level in over 11 years, which caused companies to increase employment levels. However, higher production costs in both sectors have led to further margin squeeze, especially for service providers,” said Pranjul Bhandari, chief economist for India. HSBC.

The report showed strong demand, supported by new activity in the services industry, which grew at the fastest pace since January, as well as rising industrial production and new orders.

Overall, exports grew at the fastest pace since the series began in September 2014 on the back of strong international demand, pushing economic growth to a new high for the second time this year.

Entrepreneurial sentiment for the next 12 months, especially in the services sector, where it was the highest since May 2013, was high, as was optimism among producers, the highest in over nine years.

The positive sentiment was supported by improvement in private sector job creation, the highest since September 2006. Services jobs were added at the fastest pace in 21 months.