India’s economic activity hits 14-month high in June on strong manufacturing, services growth: HSBC Flash PMI

New Delhi: India’s economic activity surged in June, buoyed by robust goods and services output, according to HSBC’s flash Purchasing Managers’ Index (PMI) survey released on Monday.

The HSBC Flash Composite Output Index, which tracks activity across manufacturing and services, rose to a 14-month high of 61, signalling a sharp and above-trend expansion across manufacturing and services.

A reading above 50 indicates expansion; the index has now remained in growth territory for over three years.

“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,” the survey, compiled by S&P, said.

“According to panellists, output was boosted by favourable demand trends, efficiency gains and tech investment,” it added.

The flash PMI data compiled by S&P Global is based on responses from around 400 manufacturers and 400 service providers.

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.

“New business placed with goods producers and service providers increased at the end of the first fiscal quarter, with the faster upturn among the former. At the composite level, the rate of expansion was the strongest seen since July 2024,” the survey said.

“When explaining June's rise, survey participants remarked on healthy demand conditions and successful marketing,” it added.

The final PMI data for June will be released early next month.

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A ‘strongly upbeat’ outlook

So far in June, private sector firms in India have signalled an unprecedented increase in new export orders, with the sharp rise boosted by a pick-up in growth among manufacturers.

While there was a slower expansion in international sales at services firms, the rate of increase was nevertheless marked with monitored companies reporting stronger demand from Asia, Europe, West Asia, and the Americas, the survey said.

The HSBC Flash India services PMI business activity index rose to 60.7 in June from 58.8 in the previous month.

The HSBC Flash India manufacturing PMI output index stood at 61.5, up from 60.3 in May.

“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.

“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,” Bhandari added.

The survey said 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,” it said. “At the sector level, there was a mild improvement in confidence at manufacturers and a downgrade in expectations at service providers.”

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