A new report paints a rosy picture of the Indian economy, revealing record growth in exports and the strongest job market in nearly two decades. The HSBC Flash Purchasing Manager's Index (PMI) data, released on Thursday, highlights a significant surge in economic activity, with employment peaks showing notable improvement.

Surges with Record Exports and Employment Peaks

Compiled by S&P Global, the PMI data indicates the third-fastest rise in private sector output since July 2010. While the manufacturing sector remains a powerhouse, leading in sales and production growth, the service sector is credited with driving the latest economic expansion.

employment peaks
Image Source: Study.com

The May survey results showcase a range of positive developments. Notably, overall exports reached a record high, and the private sector witnessed its fastest job market expansion since 2006. Business confidence also showed a significant improvement. However, a potential concern lies in rising input costs, which have pushed up the prices charged for Indian goods and services.

employment peaks
Image Source: Sakshi Education

A key metric, the "headline HSBC Flash India Composite Output Index," reflects the combined growth of both manufacturing and service sectors. In May, this index rose to 61.7, signifying the third-strongest expansion in nearly 14 years. Only July 2023 and March 2024 saw higher growth rates. Survey participants attributed this latest upsurge to successful marketing efforts, improved efficiency, strong new business intake, and overall demand strength.

Pranjul Bhandari, Chief India Economist at HSBC, commented on the statistics, stating that the composite PMI continued to grow in May, aided by a considerable acceleration in the services sector. While manufacturing growth was slightly slower than in April, it still surpassed the service sector. Bhandari also emphasized the strength of new export orders in both industries, with the fastest growth rate since data collection began in September 2014.

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