Although prices charged for Indian goods and services continued to increase in June, the rate of inflation retreated from May’s six-month high. 

Companies signal record upturn in new export orders

FPJ News Service mumbai

The combined output of India’s manufacturing and service sectors–climbed to a 14-month high of 61.0 in June, HSBC Flash India Composite Output Index data, compiled by S&P Global, revealed on Monday.

Rising from 59.3 in May, the latest reading was consistent with a sharp rate of expansion that was well above the long-run series average. “India’s flash PMI indicated strong growth in June. New export orders continued to fuel private sector business activity, especially in manufacturing. Meanwhile, the combination of robust global demand and rising backlogs prompted manufacturers to increase hiring,” said Pranjul Bhandari, chief India economist at HSBC.

Employment growth, Bhandari said, is also healthy in the services sector despite slightly weakening on a sequential basis from May to June. Finally, input and output prices continued to rise for both manufacturing and services firms, but rates of increase showed signs of softening. Several positive developments emerged from the June PMI data, as Indian companies scaled up output in response to faster increases in total new business intakes and international sales.

Notably, the upturn in export orders was the strongest since comparable data became available in September 2014. With pending workloads continuing to accumulate, firms remained in hiring mode. Meanwhile, charge inflation softened as input costs rose at the slowest pace in ten months.  Manufacturers led the upturn in business activity, though growth also picked up pace in the service economy. Rates of increase were at two-and ten-month highs, respectively.