The business activity in India accelerated in the month of June. This growth is largely driven by the manufacturing and the service sector. The job creation by the private sector in the month of June is at its fastest pace in over 18 years.
Both the manufacturing as well as the service sector witnessed significant gains in the first quarter. This paved way for a strong start in this financial year, post a 8.2 percent expansion last year. It is worth mentioning that this was the fastest among major economies last year.
Recent Numbers…
The HSBC flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P, rose from 60.5 in May to 60.9 in June. According to Maitreyi Das, Economist at HSBC, “The composite flash PMI ticked up in June, supported by rises in both the manufacturing and service sectors, with the former recording a faster pace of growth.”
The manufacturing index has increased from 57.5 in May to 58.5 in June. The service sector on the other hand grew from 60.2 to 60.4. Thereby indicating an expansion in Indian economy despite a global slowdown. The growth is on account of expanding manufacturing output, orders and booming business in service sector.
The new export orders rose for the 22nd week consecutively in June. The pace has although slightly eased after record growth in May. The robust demand is pushing companies to hire more people. Overall the employment rate is rising at the fastest pace since 2006, especially in the manufacturing sector. However, some bottleneck challenges remain for the present government.
In the mean time, the prices increase for firms have eased since May. This is a positive sign with respect to retail inflation. The rise in service input cost are at four month low. While the pace of increases in prices charged to clients have remained more or less unchanged.
Last but not the least, as per the report the business confidence remained positive in June and positive demand is expected to maintain momentum.