New Delhi, July 25 – India’s business activity accelerated to a three-month high in July as the services sector surged and manufacturing picked up momentum leading to companies hiring at the fastest pace in 18 years, according to the latest HSBC’s survey.
HSBC’s flash India composite purchasing managers’ index compiled by S&P Global, rose to 61.4 this month from June’s final reading of 60.9, marking three years of continuous expansion.
“The Flash Composite Output Index signalled continued robust growth in India’s private sector. The rise in output in July was led by a further increase in business activity in the manufacturing sector, while the pace of expansion in services output also accelerated and remained well above its long-run average,” observed Pranjul Bhandari, chief India economist at HSBC.
Overall expansion was led by the dominant services industry, which recorded a four-month high PMI of 61.1 this month up from 60.5 in June. Manufacturing also registered a strong growth with the factory PMI increasing to 58.5 from 58.3.
New orders placed with private sector firms rose sharply in July which led to a sharp increase in the number of new jobs created in the economy.
Job creation rose at the fastest pace since April 2006, supporting overall business confidence at the start of this quarter, the survey added.
The indexes are based on preliminary survey results and are a signal of business confidence in the economy. A reading above 50 indicates expansion compared with the previous month, while a print below that indicates contraction in activity.
“Companies turned more optimistic in July, following a moderation in business confidence in June,” HSBC said in a statement.
India has emerged as the fastest-growing major economy in the world, posting a growth rate of more than 8 per cent in 2023-24 amid the global slowdown. The RBI has forecast a 7.2 per cent for 2024-25 while the Economic Survey has projected a 6.5 per cent-7 per cent in the year keeping in mind the downside risk from geopolitical uncertainties.