"Breaking News: PMI Peaks at 61.7, Business Thrives"
The latest business trends with our in-depth analysis of the PMI rising to 61.7.
Business Activity in India Soars in May
Business activity in India experienced a significant boost in May, primarily fueled by the dominant services industry. An survey indicated a surge in trades at a record pace and the sharpest increase in employment rates in nearly 18 years. HSBC's flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, slightly increased to 61.7 this month from April's 61.5, marking the 34th consecutive month of growth. The composite PMI continued its strong performance in May, recording the third highest reading in nearly 14 years, largely driven by a rapid acceleration in the service sector, as highlighted by Pranjul Bhandari, chief economist for India at HSBC.
The flash services PMI index reached a four-month peak of 61.4 this month, up from April's 60.8, while the preliminary manufacturing PMI indicated solid growth, albeit slightly weaker than the previous month, dropping to 58.4 from 58.8. Strong demand was bolstered by new business in the services sector, growing at the fastest pace since January, along with increased manufacturing output and new orders. Robust global demand led to the fastest expansion in overall exports since September 2014, marking the second time export growth has reached a new high this year.
This surge in business confidence extended into the next year, particularly in the services sector, where confidence levels were the strongest since May 2013. Manufacturer confidence also reached its highest point in over nine years. Contributing to this positive sentiment was a significant improvement in job creation across the private sector, reaching the sharpest increase since September 2006, with service jobs growing at the fastest rate in 21 months.
The increase in employment could bode well for the Narendra Modi-led Bharatiya Janata Party as the country heads into a national election. According to a recent Reuters survey, the foremost challenge for the new government would be addressing unemployment.
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