Indian Private Sector Growth Remains Strong In May

(RTTNews) - India's private sector activity continued to expand strongly in May, though the pace of growth eased marginally amid weaker increases in domestic and foreign orders, flash survey results from S&P Global showed on Thursday.

The HSBC flash composite output index dropped to 58.1 in May from 58.2 in April. However, a score above 50 indicates expansion in the sector.

The survey revealed that a pick-up in growth across the service economy was offset by a weaker increase in factory production. The services PMI improved to 58.9 in May from 58.8 in April, while the manufacturing PMI declined to 54.3 from 54.7.

The growth in new business across the Indian private sector moderated as both manufacturing and services new orders increased at softer rates. Goods producers faced competitive pressures, challenging demand conditions, disruptions to travel, and the war in the Middle East. New export orders grew at the slowest pace in nineteen months.

On the price front, input price inflation accelerated to the second-highest level in nearly three years, driven by more pronounced cost pressures across the manufacturing industry amid higher prices for energy, food, fuel, gas, iron, leather, oil, plastics, rubber, steel, and transportation. Nonetheless, output charges rose at the weakest pace in four months as companies followed a greater degree of caution.

Service providers added workforce numbers to the greatest extent in nearly a year, while job creation at goods producers softened from April.

Looking ahead, business confidence remained strongly positive in May as competitive pricing strategies, marketing efforts, and hopes of better market conditions boosted optimism.