India's private sector economy maintained strong growth momentum in June, though the pace of expansion moderated from the previous month's exceptional performance, according to the latest HSBC Flash India PMI data.
Cooling from Record Highs
The composite Purchasing Managers' Index (PMI) dipped to 60.3 in June from May's impressive 61.7, which had marked one of the highest readings in nearly 14 years. While this represents a slight deceleration, the reading remains well above the 50-mark that separates expansion from contraction, indicating continued robust growth in the world's fastest-growing major economy.
Manufacturing Leads the Charge
The manufacturing sector continued to be the primary driver of growth, with factory output expanding at a faster rate than services for the first time in several months. New orders remained strong across both sectors, though the services segment showed more pronounced signs of cooling compared to the manufacturing powerhouse.
Price Pressures Persist
Businesses reported ongoing cost pressures, with input prices rising at the fastest pace in over three years. This inflationary pressure was particularly evident in the manufacturing sector, where raw material costs continued to climb. Companies responded by passing some of these costs to consumers, though the rate of output price increase remained moderate.
Employment and Business Sentiment
Employment levels saw modest improvement, with businesses continuing to hire to meet production demands. However, the pace of job creation remained relatively subdued compared to the overall growth in activity. Business confidence remained positive overall, though some concerns emerged about the sustainability of current growth rates amid global economic uncertainties.
Expert Analysis
Economists note that while the moderation from May's peak was expected, the continued strong performance reinforces India's position as a bright spot in the global economy. The data suggests that the Indian economy is maintaining healthy growth momentum despite some cooling in the services sector and persistent cost pressures.
The June figures represent the 35th consecutive month of expansion for India's private sector, highlighting the resilience of the economy in the post-pandemic era. Market watchers will be closely monitoring whether this growth trajectory can be sustained in the coming months amid evolving global economic conditions.
