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Indian Biz Activity Surges in June, Led by Manufacturing and Services Growth

Updated: Jun 22, 2024 05:08:27pm

Indian Biz Activity Surges in June, Led by Manufacturing and Services Growth

New Delhi, Jun 22 (KNN) Business activity in India accelerated in June, outpacing May's performance, driven by significant gains in both manufacturing and services sectors. 

This robust growth, coupled with the strongest job creation rate in over 18 years, signals a promising start to the new financial year for Asia's third-largest economy.

The HSBC flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 60.9 in June from 60.5 in May. This marks nearly three years of continuous expansion, with readings above 50 indicating growth.

Maitreyi Das, global economist at HSBC, noted, "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 report highlights several key developments. The manufacturing PMI jumped to 58.5 from 57.5 in May, while the services PMI slightly increased to 60.4 from 60.2. 

New export orders expanded for the 22nd consecutive month, and employment generation rose at the fastest pace since April 2006.

The surge in business activity comes on the heels of India's impressive 8.2 per cent economic growth last year, the fastest among major economies. This expansion was partly driven by a buoyant manufacturing sector.

Despite global economic headwinds, India's economy continues to show resilience. Strong demand has prompted companies to increase hiring, with manufacturers leading the job creation efforts. 

This trend aligns with the newly re-elected Modi government's focus on boosting employment, which remains a critical challenge.

On the inflation front, there's cause for optimism. Price increases at firms have eased since May, potentially leading to a moderation in retail inflation. 

Input cost inflation in the services sector reached a four-month low, while manufacturing firms were able to pass on higher costs to customers.

Looking ahead, business optimism for the coming year remains positive, albeit slightly tempered. Companies anticipate output gains based on pipeline proposals, efficiency improvements, and favourable exchange rate forecasts.

As India's economy maintains its growth trajectory, all eyes will be on how the government leverages this momentum to address persistent challenges, particularly in job creation and inflation management.

(KNN Bureau)


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