The Indian economy made remarkable progress in May, reflected in the latest HSBC Flash Purchasing Manager's Index data announced on Thursday. This data, compiled by S&P Global, flagged off significant milestones such as a huge spurt in exports and the strongest increase in employment in almost 18 years.
The PMI figures indicated the third-highest upswing in private sector output since July 2010. While the manufacturing segment remained a positive factor for the growth of sales and production, it was the service sector which fueled the latest acceleration in the overall economic activity.
May's survey flagged off several positive trends such as a record surge in total exports, the sharpest expansion in private sector employment since 2006, and a marked pick-up in business sentiment. But there was a faster rise in input costs, too, pushing up prices for Indian products and services.
According to the survey, “May saw the headline HSBC Flash India Composite* Output Index – a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors – rise from a final reading of 61.5 in April to 61.7, which indicated the third-strongest rate of expansion in close to 14 years."
On the results, Pranjul Bhandari, Chief India Economist at HSBC, observed, "The composite PMI ticked up further in May, marking the third strongest reading in close to 14 years, supported by a sharp acceleration in the services sector. While the manufacturing sector growth did decelerate somewhat in May, it still managed to outpace that in the service economy."
New export orders across both sectors also rose at the fastest pace since the series began in September 2014, the latest data showed.
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