Manufacturing, services PMI rebound in June

The latest HSBC Flash India PMI survey report, which showed a slight blip in May, has underlined the return of momentum in both the manufacturing and services sectors.

The services purchasing managers’ index (PMI) rose to 60.4 in June 2024 from 60.2 last month, while the manufacturing PMI climbed to 58.5 in June from 57.5 in May. In PMI, 50 is the critical mark, separating growth from contraction.

The flash PMI survey is a precursor to the PMI reading, which is released in the first week of every month.

Decrease in manufacturing activity to a three-month low of 57.5 in May was attributed to intense heatwaves, which had resulted in reduced working hours and lower volumes. Dip in the services sector was caused by following stiff competition and price pressures amid a severe heatwave.

“The composite flash PMI ticked up in June, supported by rises in both the manufacturing and service sectors, with the former recording a faster pace of growth. New orders gained growth momentum for both sectors, with a faster upturn among manufacturers. Meanwhile, new export orders slowed slightly in June, although the rate of expansion was the second fastest since the beginning of the series,” Maitreyi Das, global economist at HSBC, told the media.

“The output price index suggests manufacturing firms were able to pass on higher costs to customers. Overall, optimism about future output weakened in June, but remained above the historical average,” Das added.