Blitz Bureau
NEW DELHI: The HSBC Flash India Composite Output Index – which measures the month-on-month change in the combined output of India’s manufacturing and service sectors – on May 22 reported robust business activity in May in the country, climbing to a 13-month high of 61.2, compared with 59.7 in the previous month. At 61.2 in May, the HSBC Index showcased a sharp rate of expansion in private sector activity.
“The increase was the most pronounced since April 2024. There was a mild loss of growth momentum in the manufacturing industry but service providers reported the fastest rise in output in 14 months,” according to a HSBC Flash India PMI note. The HSBC Flash India Manufacturing PMI was little changed from April’s reading of 58.2. At 58.3 in May, the latest figure was consistent with a sharp improvement in the health of the sector.
Private sector growth in India moved up a gear during May, boosted by an acceleration in the service economy. Strong influxes of new business, both from domestic and international markets, induced quicker expansions in business activity and employment.
There was also an improvement in business confidence for the first time since January, said the HSBC.
“India’s flash PMI indicate another month of strong economic performance. Growth in production and new orders among manufacturing firms remains robust, despite a marginal cooling from the rates of increase observed in April,” said Pranjul Bhandari, Chief India Economist at HSBC.
Notably, there is a firm pick-up in the employment, especially in the service sector, suggesting healthy job creation accompanies the expansion of both India’s manufacturing and service sectors, Bhandari added.
While goods producers indicated the slowest increase in output for three months during May, service providers reported the fastest rise since March 2024.
At the composite level, the latest upturn was the quickest in just over a year. Monitored companies attributed growth to buoyant demand, investment in technology and expanded capacities, according to the note.
Underlying data indicated that ongoing job creation enabled companies to stay on top of their workloads in May. Not only did employment continued to increase, but growth also hit a fresh series record (since December 2005).
Anecdotal evidence showed that full- and part-time staff had been recruited on permanent and temporary bases,” said the HSBC report.