Export orders surge, manufacturing jobs hit 20-year record
India’s private sector activity surged in June, reaching its fastest growth in over a year, as strong domestic and export demand drove a spike in production and hiring, according to the HSBC Flash India Composite PMI released Monday.
The composite index, compiled by S&P Global, rose to 61.0 in June from 59.3 in May, beating analyst expectations and marking the strongest reading in 14 months. The data indicates nearly four years of uninterrupted expansion across services and manufacturing.
Services activity jumped to 60.7 — the highest since August 2023 — while the manufacturing PMI climbed to 58.4 from 57.6, supported by booming output and export orders.
Record-breaking exports and manufacturing hiring
“New export orders continued to fuel private sector business activity, especially in manufacturing,” said Pranjul Bhandari, chief India economist at HSBC. The report highlighted the sharpest growth in international sales since data collection began in 2014, with manufacturing leading the charge.
This surge in global demand also spurred record hiring in manufacturing. Employment growth in the sector hit a new peak since the data series began over 20 years ago. While service providers also added jobs, the pace was slightly slower than in May.
Price pressures ease, RBI eyes growth support
Cost pressures softened in June, with input price inflation hitting a 10-month low. This allowed firms to limit price hikes and remain competitive. Output price inflation decelerated from May’s six-month high, offering further relief to consumers.
The moderation in inflation — which dropped to a six-year low in May — could give the Reserve Bank of India more room to focus on growth and consider interest rate cuts amid the uncertainty caused by U.S. tariffs.
Confidence slips despite strong data
Despite the upbeat data, business confidence across the private sector fell to its lowest level in more than two years. Manufacturers grew slightly more optimistic, but service firms were more cautious about future growth.
