India's biz activity grows faster in June, job creation at 18-yr high: PMI

According to a business survey, business activity in India accelerated in June compared to May, driven by gains in manufacturing and services. This growth marked the strongest pace of job creation in over 18 years. HSBC's flash India Composite Purchasing Managers' Index, compiled by S&P Global, rose to 60.9 in June from 60.5 in May, maintaining nearly three years above the 50-level that separates growth from contraction. The manufacturing index increased to 58.5 from 57.5. In contrast, the services index slightly rose to 60.4 from 60.2, indicating continued expansion in India despite a global economic slowdown. This growth was supported by strong expansions in manufacturing output, orders, and business gains among services firms.

New export orders expanded for the 22nd consecutive month in June, though the pace slightly eased after record growth last month. Robust demand led to the fastest employment generation since April 2006, with job creation higher among manufacturers than in the services sector. Boosting jobs remains a significant challenge for the government, recently elected for a third term. Meanwhile, price increases at firms have eased since May, improving the retail inflation outlook. Services input costs rose at a four-month low rate while prices charged to clients remained stable. "Input cost inflation eased slightly in June but remained elevated, with increases in labor and material costs," noted global economist at HSBC Ms. Maitreyi Das. Despite a dip in business optimism to a three-month low, the outlook for the coming year remains positive, with companies expecting output gains from proposals in the pipeline, efficiency improvements, and favourable exchange rate forecasts.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.