News Brief

Robust Manufacturing And Services Drive India's Job Growth Pace In June To Record 18-Year High: Here's All About It

Swarajya Staff

Jun 21, 2024, 02:49 PM | Updated 02:53 PM IST

Workers at a factory.
Workers at a factory.

Business activity in India has accelerated in June, driven by gains in manufacturing and services.

This growth has led to the strongest pace of job creation in over 18 years, according to a report from The Economic Times.

Significant gains in both sectors at the end of the first fiscal quarter set a strong tone for India's economy this financial year, following an 8.2 per cent expansion last year — the fastest among major countries, partly due to buoyant manufacturing.

The HSBC flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, increased to 60.9 in June from 60.5 in May.

Maitreyi Das, a global economist at HSBC, noted that "the composite flash PMI ticked up in June, supported by rises in both the manufacturing and service sectors, with the former recording a faster pace of growth."

The manufacturing index rose to 58.5 from 57.5 in May, while the services industry's reading edged up to 60.4 from 60.2, indicating continued expansion in India despite a slowing global economy. This growth was supported by strong expansions in manufacturing output, orders, and business gains among service firms.

New export orders grew for the 22nd consecutive month in June, though the pace slightly eased after record growth in May. Robust demand led companies to hire more people, with overall employment rising at the fastest rate since April 2006, particularly in manufacturing.

Boosting jobs remains a significant challenge for Prime Minister Narendra Modi's government, which was re-elected for a rare third term earlier this month.

Meanwhile, price increases at firms have eased since May, which is positive for the outlook on retail inflation. The rise in services input costs slowed to a four-month low, while the pace of increases in prices charged to clients remained broadly unchanged.

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