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Private sector growth gains momentum in May with acceleration in services: HSBC Flash India PMI
May-22-2025

The HSBC Flash India PMI report has showed that private sector growth in India moved up a gear during May, boosted by acceleration in the service economy. There was also an improvement in business confidence for the first time since January. The HSBC Flash India Composite Output Index -- a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors -- surged to 61.2 in May from a final reading of 59.7 in April. The HSBC Flash India Manufacturing PMI index also rose to 58.3 in May from 58.2 in April.

As per the report, goods producers indicated the slowest increase in output for three months during May, while service providers reported the fastest rise since March 2024. At the composite level, the latest upturn was the quickest in just over a year. The report further showcased reduced pressure on the operating capacities of Indian private sector companies, as outstanding business volumes rose at the slowest pace since September 2024. Service providers noted the weakest increase in backlogs for eight months and goods producers signaled no change since April.

On the inflation front, across the private sector, the rate of input cost inflation hit a five-month high and broadly converged to its long-run average. The acceleration was widespread across the manufacturing and service economies. Prices charged for Indian goods and services rose at a quicker rate in May, with the aggregate rate of inflation at a six-month high. Notably, manufacturing firms revealed the steepest increase in over 11-and-a-half years. Demand strength facilitated the pass-through of rising expenses to clients.


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