India’s economic activity reached a 14-month high in June, driven by a sharp increase in new business orders and a record rise in exports, according to HSBC’s flash Purchasing Managers’ Index (PMI) data released on Monday. The HSBC Flash India Composite Output Index, which reflects the combined performance of the manufacturing and services sectors, rose to 61.0 in June from 59.3 in May, indicating robust expansion well above the long-term average.
Manufacturers led the momentum, although the services sector also recorded stronger growth. June’s PMI readings marked the fastest expansion in manufacturing in two months and in services in ten months. The report attributes the upturn to healthy demand conditions, successful marketing efforts, and increased investment in technology, which helped firms boost output.
As workloads continued to pile up, companies responded with higher hiring activity. Both manufacturing and services sectors saw job creation, with manufacturers particularly ramping up recruitment to keep pace with rising backlogs. Although services hiring slightly weakened on a month-on-month basis, overall employment growth remained positive.
On the inflation front, input costs rose at the slowest rate in ten months, easing some pressure on firms. Output prices also increased, but at a moderated pace. According to panellists, the moderation in cost pressures was supported by operational efficiencies and favourable market conditions.
The HSBC Flash India Manufacturing PMI climbed from 57.6 in May to 58.4 in June, marking the best improvement in operating conditions since April 2024. Meanwhile, the growth in new business orders and exports was strongest among goods producers, although services firms also experienced a meaningful uptick.
Pranjul Bhandari, Chief India Economist at HSBC, noted that the strong growth in June was underpinned by a continued rise in new export orders, especially in the manufacturing sector. She added that employment remained resilient and that although price pressures persisted, the pace of inflation was easing.
The report signals strong private sector momentum as India enters the second half of 2025, with the combination of rising demand, controlled inflation, and steady job creation pointing to a favourable economic outlook.
-IANS
