India’s private sector activity in May saw its third-largest growth since 2010; job creation at 18: report

India private sector activities saw a significant increase in May, marking the third largest increase since July 2010, according to preliminary results from a private study released on Thursday. The study also revealed the most significant employment growth in nearly 18 years.
According to an ET report, the HSBC Flash India Composite Output Index rose to 61.7 in May from 61.5 in the previous month, helped by rising export demand and accelerating growth in the services sector.
Pranjul Bhandari, chief Indian economist at HSBC, noted: “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.”

Although activity in the manufacturing sector fell slightly in May to 58.4 from 58.8 the previous month, marking the slowest pace since February, it remained above the long-term average.
In turn, the services sector grew at the fastest pace in four months. The Flash PMI includes responses from 80% of the 800 manufacturing and service companies surveyed, and final data will be released in the first week of June.
According to an ET survey, the services sector is expected to contribute to the growth in the fourth quarter of FY24. The latest survey predicted the growth in the fourth quarter of FY24 at 6.8%, with the growth in FY24 at 7.8%. The median of ET Poll’s 16 forecasts for FY25 was 6.8%, which is in line with IMF estimates.
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The survey also showed an increase in optimism about the future – the future production index increased by almost seven points in May. Bhandari said: “The level of optimism about the coming year has increased to the highest level in over 11 years, which has resulted in companies increasing hiring levels.”
One sec employment growth has remained stable since last year and showed signs of improvement in May. The report further noted: “Another factor supporting employment growth was the intensifying pressure on production capacity. In total, in the manufacturing and services sectors, the volumes of unrealized activity increased at the highest rate in 21 months.