Indian business activity rose sharply in June, driven by growth in manufacturing and services

New Delhi, June 22 (KNN) Business activity in India accelerated in June, outpacing May’s performance, led by strong gains in both the manufacturing and services sectors.

This strong growth, combined with the fastest pace of job creation in over 18 years, signals a promising start to the new fiscal year for Asia’s third-largest economy.

The HSBC Flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 60.9 in June from 60.5 in May. This represents almost three years of continuous development, with readings above 50 indicating growth.

Maitreyi Das, global economist at HSBC, noted: “The composite flash PMI rose in June, supported by gains in both the manufacturing and services sectors, with the former registering faster growth rates.”

The report highlights several key events. The manufacturing PMI jumped to 58.5 from 57.5 in May, while the services PMI rose slightly to 60.4 from 60.2.

New export orders rose for the 22nd month in a row, and jobs grew at the fastest pace since April 2006.

The surge in business activity comes after India’s impressive economic growth last year, which was 8.2%, the fastest among major economies. This expansion was driven in part by the booming manufacturing sector.

Despite global economic headwinds, India’s economy continues to demonstrate resilience. Strong demand has prompted companies to increase hiring, with manufacturers leading the way in job creation efforts.

This trend is in line with the newly elected Modi government’s focus on increasing employment, which remains a key challenge.

When it comes to inflation, there are reasons for optimism. Price increases in companies have decreased since May, which may lead to a reduction in retail inflation.

Input cost inflation in the services sector hit a four-month low, while manufacturing companies managed to pass on higher costs to customers.

Looking ahead, business optimism for the coming year remains positive, if somewhat moderate. Companies anticipate production growth based on pipeline proposals, efficiency improvements and favorable exchange rate forecasts.

As India’s economy continues on its growth trajectory, all eyes will be on how the government leverages this momentum to address persistent challenges, particularly in terms of job creation and inflation management.

(KNN Office)