Positive employment news emerges from the manufacturing sector, with increases in both full-time and part-time jobs.
June 2025 marks a new success story for the Indian economy. The private sector registered its fastest growth rate in 14 months during this period. According to the recent Flash India Composite Purchasing Managers' Index (PMI) report by HSBC and S&P Global, June witnessed significant improvements in demand, order levels, and employment. The report indicates that increased domestic and international orders strengthened both the manufacturing and services sectors.
Understanding the PMI and its Significance
The Purchasing Managers' Index (PMI) is an economic indicator based on the activities of private companies, including production, new orders, employment, and supply chain performance. A PMI reading above 50 signifies growth, while a reading below 50 indicates contraction.
According to the HSBC report, the composite PMI rose from 59.3 in May to 61 in June. This marks the 47th consecutive month the index has remained above 50, demonstrating the sustained and stable growth of India's private sector.
Manufacturing Sector Strength
The manufacturing PMI also increased to 58.4 in June, up from 57.6 in May and exceeding April 2024 figures. Improved inventory management, increased production, new job creation, and new orders are considered the primary drivers of this improvement in the manufacturing sector.
The report highlights that companies accelerated production and streamlined their supply chains in June. This led to increased market availability and improved delivery times, showcasing the robustness of India's industrial capacity and production systems.
Positive Trends in the Services Sector
While the manufacturing sector demonstrated b performance, the services sector also significantly improved its position in June. Although slightly behind manufacturing in terms of hiring, the sector showed growth indicators driven by order demand.
According to Pranjul Bhandari, Chief India Economist at HSBC, the increase in backlogs and domestic and international demand necessitated new recruitments by companies. While the pace of hiring in the services sector may have been slightly slower, it indicates continued improvement.
Positive Employment News
This report clearly indicates a resurgence in private sector employment prospects. The manufacturing sector witnessed an increase in both full-time and part-time jobs.
Companies reported that increased new orders necessitated higher production, requiring additional workforce. This has created new employment opportunities for young people. Furthermore, the report anticipates an acceleration in hiring within the services sector in the future.
Increased Technological Investment and Output
Another significant aspect highlighted in the report is the prioritization of technological investments by companies. This has resulted in improved output and increased efficiency.
Investments in areas such as artificial intelligence, data analytics, and automation have propelled productivity to new heights. This has led to increased production capacity and improved customer satisfaction for companies.
India's Strength Compared to Other Asian Economies
The flash PMI data also demonstrates that India's economy remains significantly more stable and robust than other Asian nations. While countries like China, South Korea, and Japan experienced slower growth in production and services, India performed exceptionally well, even amidst challenging circumstances.
This is attributed to India's comprehensive economic policies, entrepreneurial spirit, and digital transformation initiatives, which have made the country globally competitive.
Report Basis and Future Outlook
This report is based on feedback from approximately 800 companies, incorporating the opinions of 85-88% of them. The final detailed report will be released on July 1st (Manufacturing) and July 3rd (Services and Composite).
The report suggests that if this growth momentum continues, India's GDP growth rate could exceed expectations. With positive growth already observed in the first quarter of fiscal year 2025, a continuation of this trend could establish India as a major force in the global economy.
