The health of the Indian private sector continued to improve in June, according to the latest PMI data. The HSBC India Composite Output Index rose in June, posting 55.7 up from 55.3 in May. The latest reading pointed to the fastest expansion of output in four months.
Growth reflected rising output at both manufacturers and service providers. After adjusting for seasonal factors, the headline HSBC Services Business Activity Index - which is based on a single question asking respondents to report on the actual change in business activity at their companies compared to one month ago - posted 54.3 in June, down from 54.7 in May.
Output increased solidly as order book volumes continued to expand. Manufacturing production, meanwhile, increased at the sharpest pace since February.
New business growth in the service sector remained broadly in line with that in the previous month and the current expansionary period was extended to three years and two months. Composite data pointed to increasing new orders in June, extending the current expansionary period to 38 successive months.
Service providers increased staffing levels during June, marking a four-month sequence of expansion. The increase in payroll numbers was the strongest since June 2011 but was below the long-run average for this series. The rate of job creation at manufacturers also accelerated, leading to the size of the private sector workforce increasing at the fastest pace for 12 months.
The HSBC India Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 350 private service sector companies. The panel has been carefully selected to accurately replicate the true structure of the services economy.
The HSBC India Composite PMI is a weighted average of the Manufacturing Output Index and the Services Business Activity Index, and is based on original survey data collected from a representative panel of over 800 companies based in the Indian manufacturing and service sectors.