India’s private sector: PMI surges to a 14-month high of 61.0; strong demand lifted activity in June

India’s private sector activity showed strong momentum in June, reaching its fastest pace in over a year, as firms ramped up production to meet booming domestic and international demand. These figures marked nearly four straight years of growth, fresh survey data released on Monday.The HSBC Flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, jumped to a 14-month high of 61.0 from May’s 59.3.Both manufacturing and services saw strong gains. The services activity index rose to 60.7 from 58.8, its strongest reading since August 2023, while the manufacturing PMI climbed to 58.4 from 57.6, driven by strong output and a spike in new orders.“New export orders continued to fuel private sector business activity, especially in manufacturing,” Pranjul Bhandari, chief India economist at HSBC, told Reuters.Export demand was a standout, with new international business growing at the fastest pace since the survey began tracking such data in September 2014. Manufacturers led this surge, outpacing the more moderate growth seen by service providers.Hiring activity also saw a notable uptick. Manufacturers reported their strongest employment growth since records began over 20 years ago, while service sector hiring remained solid, though slightly slower than in May.“The combination of robust global demand and rising backlogs prompted manufacturers to increase hiring,” Bhandari said.Price pressures offered some relief as input cost inflation eased to a 10-month low, enabling companies to hold back on passing costs to customers. As a result, output price rises moderated after hitting a six-month high in May.May’s figures showed consumer prices at a six-year low, which may give the Reserve Bank of India more room to support growth and consider cutting interest rates, especially in light of global trade uncertainties.Despite the upbeat data, overall business confidence dipped to its lowest level in over two years. Manufacturers showed slightly improved sentiment, but service firms expressed caution about the year ahead.