India witnessed a remarkable rise in exports and a substantial increase in employment levels in May, marking the most substantial upturn in job creation in nearly 18 years. The latest data from the HSBC Flash Purchasing Manager’s Index (PMI), released on Thursday, revealed these positive trends, indicating a robust economic performance.
Compiled by S&P Global, the PMI data highlighted the third-strongest upturn in private sector output since July 2010. While the manufacturing sector continued to drive growth in sales and output, it was the service industry that played a pivotal role in accelerating overall economic expansion in the country.
The survey for May also showcased other encouraging developments, including a record surge in aggregate exports, the sharpest expansion in private sector employment since 2006, and a notable improvement in business confidence. However, the rise in input costs led to an increase in prices charged for Indian goods and services.
The HSBC Flash India Composite Output Index, which measures the combined output of India’s manufacturing and service sectors, rose from 61.5 in April to 61.7 in May, marking the third-strongest rate of expansion in nearly 14 years. This growth was surpassed only in July 2023 and March 2024, with factors such as successful advertising, efficiency gains, strong new work intakes, and robust demand cited as contributors to the upturn.
Pranjul Bhandari, Chief India Economist at HSBC, noted that the composite PMI for May recorded the third strongest reading in close to 14 years, supported by a significant acceleration in the services sector. While manufacturing sector growth slightly slowed in May, it continued to outperform the service economy.
Furthermore, the latest data indicated a positive trend in new export orders for both sectors, with the fastest pace of growth since the series began in September 2014, signaling a promising outlook for India’s economic performance.
