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India’s Economic Momentum Accelerates as PMI Reaches 14-Month Peak: Is it True?

India’s private sector economy is firing on all cylinders, with the HSBC Flash Purchasing Managers’ Index (PMI) climbing to 61 in June—the highest in 14 months. This robust expansion, led by manufacturing and services, underscores the country’s resilient economic momentum.

Key Highlights from the June PMI Report
Composite PMI at 61: Signals sharp expansion (readings above 50 indicate growth).
Manufacturing PMI jumps to 58.4, the strongest since April 2024.
Services PMI rises to 60.7, marking a 10-month high.
New export orders surge, especially in manufacturing, boosting business activity.
Employment grows in both sectors, though services saw a slight dip from May.

What’s Driving the Growth?
Strong demand from domestic and international markets.
Efficiency improvements and tech investments enhancing productivity.
Aggressive marketing strategies helping businesses secure more orders.
Sector-Wise Performance
Manufacturing:
Output index climbs to 61.5, up from 60.3 in May.
New orders expand at the fastest pace since July 2024.
Services:
Business activity rises, supported by strong demand from Asia, Europe, and the Americas.
Export growth slows slightly but remains healthy.

Employment and Pricing Trends
Hiring increases as companies tackle rising backlogs.
Input and output costs rise, but inflation shows signs of softening.

Business Outlook: Optimistic but Cautious
While businesses remain upbeat about future growth, overall confidence has dipped to a two-year low, with services firms slightly less optimistic than manufacturers.
Final PMI data for June will be released next month, offering deeper insights into India’s economic trajectory.

Sample Questions & Answers for Competitive Exams
Q1: What does an HSBC PMI reading above 50 indicate?
A1: A PMI above 50 signals economic expansion, while below 50 indicates contraction.
Q2: Which sector led India’s economic growth in June 2024?
A2: Manufacturing drove the upturn, with PMI hitting 58.4, the highest since April 2024.
Q3: What contributed to the rise in business activity in June?
A3: Strong demand, efficiency gains, and tech investments boosted output.
Q4: How did India’s services PMI perform in June?
A4: The services PMI rose to 60.7, a 10-month high, reflecting robust demand.
Q5: What trend was observed in employment according to the June PMI?
A5: Hiring increased in both sectors, though services saw a mild slowdown compared to May.