New Delhi, June 23: Despite global instability, private sector activities in India remained robust in June, with an increase in new orders. This information was revealed in the HSBC Purchasing Managers’ Index (PMI) data released on Tuesday.
According to the HSBC flash PMI data, the demand for Indian goods and services saw a slowdown in June, limiting the potential for output level increases. Following several months of growth, the pace of inventory accumulation slowed, leading to a decline in manufacturing output growth.
The HSBC Flash India PMI Composite Output Index fell to 57.4 in June, down from 59.3 in May. A PMI reading above 50 indicates an expansion in economic activities.
The PMI data indicated that recent economic activity gains have been curtailed due to cost pressures and a decrease in demand. Pranjul Bhandari, Chief Economist for India at HSBC, stated, “There was a slight easing in private sector activities in June. New export orders remained strong, and the order-to-inventory ratio increased, signaling continued strength in manufacturing activities. Input costs in the private sector rose, but this increase was the slowest in the past five months.”
The PMI survey revealed that private sector companies consistently reported rising expenditures each month, attributing this to increasing raw material prices.
Specifically, survey participants noted rising costs in chemicals, food items, fuel, gas, metals, and utilities (such as electricity and water services). Despite this, the overall inflation rate has decreased for the third consecutive month, reaching its lowest level since January.
According to the PMI data, the manufacturing sector faced greater cost pressures compared to the service sector.
Export trends in June were mixed; the service sector experienced rapid growth, while the manufacturing sector recorded its slowest growth since March 2023.
Companies are optimistic about a significant increase in production over the next 12 months compared to current levels.
Leave a Comment