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India's private sector activity expanded sharply in May, reaching its highest pace in over a year, driven by a robust performance in the services sector.
According to the HSBC Flash PMI data released on Wednesday, the HSBC India Composite PMI Output Index surged to 61.2 in May from 59.7 in April, indicating a strong rate of expansion in both the manufacturing and services sectors. The HSBC Flash India Services PMI Business Activity Index rose to 61.2 in May from 58.7 in April, marking the fastest rise in output in 14 months. This jump was supported by strong demand conditions, a solid inflow of new business, and improved sentiment. HSBC said "The increase was the most pronounced since April 2024. There was a mild loss of growth momentum in the manufacturing industry but service providers reported the fastest rise in output in 14 months". The manufacturing sector however, showed a slight dip in momentum. The HSBC Flash India Manufacturing PMI Output Index fell marginally to 61.4 in May from 61.9 in April. But, the broader HSBC Flash India Manufacturing PMI, which accounts for new orders, output, employment, suppliers' delivery times, and stocks of purchases, edged up slightly to 58.3 from 58.2 in April, reflecting a continued sharp improvement in the health of the sector. The overall upturn in private sector output was the strongest since April 2024. This acceleration was mainly due to the services segment, which saw faster expansion in business activity and employment. Firms across the board reported strong inflows of new business, both domestically and from international markets. In addition, business confidence improved for the first time since January, signaling optimism among firms regarding future business prospects. Companies attributed the growth to strong demand conditions, investments in technology, and expanded production capacities. However, inflationary pressures also increased during the month. The HSBC Flash PMI data pointed to the fastest rise in input costs and output charges since late 2024, with inflation levels hitting their highest since April 2024. While manufacturers noted the slowest output growth in three months, service providers led the expansion, lifting the overall private sector performance to a 13-month high. (ANI)
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