India's private sector growth accelerates in May, led by services: HSBC Flash PMI
New Delhi: India's private sector gained momentum in May, led by a sharp acceleration in services activity, as strong demand from both domestic and international markets drove business expansion and hiring, according to the HSBC Flash India PMI survey released Thursday.
Compiled by S&P Global, the survey also signalled a revival in business confidence, the first uptick since January.
The HSBC Flash India Composite Output Index, which captures activity across both manufacturing and services, is estimated to have risen to 61.2 in May from 59.7 in April, indicating robust expansion. A reading above 50 denotes growth, and the index has now remained in expansion territory for over three years.
'The increase was the most pronounced since April 2024,' the report said.
While manufacturing showed a slight slowdown in growth, the services sector posted its fastest output rise in 14 months, the survey noted.
Based on responses from roughly 400 manufacturers and 400 service providers, the flash PMI offers an early estimate ahead of final data, which will be released early next month.
The HSBC Flash India Manufacturing PMI edged up to 58.3 in May from 58.2 in April, signalling continued strength, albeit at a stable pace. In contrast, the Services PMI Business Activity Index surged to 61.2 from 58.7, while the Manufacturing Output Index dipped marginally to 61.4 from April's 61.9.
'While goods producers indicated the slowest increase in output in three months, service providers reported the fastest rise since March 2024,' the survey said.
'At the composite level, the latest upturn was the quickest in just over a year. Surveyed firms attributed the momentum to buoyant demand, investments in technology, and capacity expansion.'
India's ambition to become a $10 trillion economy over the next decade is being propelled by growth in manufacturing, particularly in sectors such as semiconductors, electronics, electric vehicles, renewables, and defence. To support this goal, the government has ramped up capital investment in infrastructure, job creation, and industrial development.
"India's flash PMI indicates another month of strong economic performance. Growth in production and new orders among manufacturing firms remains robust, despite a marginal cooling from the rates of increase observed in April," said Pranjul Bhandari, Chief India Economist at HSBC.
'Notably, there is a firm pickup in employment, especially in the services sector, suggesting healthy job creation is accompanying the expansion of India's manufacturing and services sectors,' she added.
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