India's private sector witnessed its fastest growth in over a year in May 2025, with the HSBC Flash India Composite Purchasing Managers' Index (PMI) rising to 61.2 from April's 59.7. This marks the highest reading since April 2024, indicating robust expansion across the economy.
Services Sector Surge: The services PMI climbed to a 14-month high of 61.2, up from 58.7 in April. This growth was driven by strong domestic and international demand, technological investments, and capacity expansion.
Manufacturing Steady: The manufacturing PMI edged up to 58.3 from 58.2, maintaining steady growth. However, manufacturing output slightly declined to 61.4 from 61.9, indicating a mild loss in momentum.
Employment Growth: Employment saw a significant uptick, especially in the services sector, reaching the highest level since the survey began in December 2005. This suggests healthy job creation alongside business expansion.
Inflationary Pressures: Input cost inflation reached a five-month high, with output prices rising sharply, particularly in manufacturing. These cost pressures may influence retail inflation in the coming months.
Business Confidence Rebounds: After a decline in April, business sentiment improved in May, with firms expressing optimism about future sales and activity, particularly in the services sector.
Overall, the data indicates a robust economic performance for India in May 2025, led by a booming services sector and steady manufacturing activity, despite rising inflationary pressures.
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