India’s economic activity surged to its highest level in 14 months during June, driven by robust growth in both manufacturing and services. The HSBC Flash India Composite Output Index rose to 61.0 in June from 59.3 in May, indicating a substantial and sustained increase in company output.
This seasonally adjusted index measures the monthly performance of India’s industrial and service sectors together.
This expansion was dominated by the manufacturing sector, with service sector growth also picking up. The respective increases reflected the best performance in two and 10 months. The most recent numbers show not just rising domestic demand, but also a record increase in export orders. According to HSBC, businesses are increasing production in response to the continuous increase in new work orders.
On the inflation front, input costs increased at the lowest rate in ten months, signalling some relief for firms.
The Manufacturing PMI increased to 58.4 in June from 57.6 in May, indicating the most favourable operating conditions since April 2024. Panellists attributed the increase to higher demand, better marketing strategies, and technology investments. Pranjul Bhandari, HSBC’s Chief India Economist, stated that strong global demand and expanding backlogs continue to fuel corporate growth.
