India’s private sector has witnessed a strong wave of momentum, as the latest HSBC Flash PMI data shows a surge in business activity during June. The composite output index—which blends the performance of manufacturing and services—climbed to a 14-month high of 61.0, up from 59.3 in May. The latest reading was consistent with a sharp rate of expansion that was well above the long-run series average.
Notably, the upturn in export orders was the strongest during the period since comparable data became available. The report highlighted that Manufacturers led the upturn in business activity, though growth also picked up pace in the service economy. Rates of increase were at two- and ten-month highs, respectively. According to panellists, output was boosted by favourable demand trends, efficiency gains and tech investment.
The HSBC Flash India Manufacturing PMI–a weighted average of the new orders, output, employment, suppliers’ delivery times and stocks of purchases indices–rose from 57.6 in May to 58.4 in June, signalling the best improvement in operating conditions since April 2024.
Employment is on the rise as well. Manufacturing job creation hit a series peak, and although hiring slowed slightly in services compared to May, it remained healthy. Both full-time and part-time staff were recruited for permanent and temporary roles.
On the price front, input cost inflation eased to a ten-month low. While prices for labour and metals like copper and steel did edge higher, the pace was milder. Output charges, too, rose at a slower rate — suggesting that firms are carefully managing costs amid competition.
"India’s flash PMI indicated strong growth in June. New export orders continued to fuel private sector business activity, especially in manufacturing. Meanwhile, the combination of robust global demand and rising backlogs prompted manufacturers to increase hiring," said Pranjul Bhandari, chief India economist at HSBC.
She also highlighted that employment growth is also healthy in the services sector despite slightly weakening on a sequential basis from May to June. Finally, input and output prices continued to rise for both manufacturing and services firms, but rates of increase showed signs of softening.
The report said that Indian companies remained strongly upbeat towards the year-ahead outlook for business activity. The overall level of positive sentiment slipped to its lowest in just over two years, but was broadly aligned with its trend. At the sector level, there was a mild improvement in confidence at manufacturers and a downgrade in expectations at service providers.
