India's private sector economy continues to expand in July: HSBC Flash India PMI data
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India's private sector economy continued to expand in July, aided by stronger increases in new business intakes and output. The headline 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 from 60.9 in June to 61.4 in July.
The HSBC Flash India PMI data, compiled by S&P Global, indicated that new orders placed with private sector firms in India rose sharply in July. The upturn was broadly similar to June and the quickest in three months. As was the case for output, rates of expansion accelerated in the manufacturing and service sectors. However, the rising material and labour costs added to inflationary pressures. In particular, selling prices rose to the greatest extent since February 2013.
There was a pick-up in capacity pressures among private sector companies in India, as seen by a quicker increase in outstanding business volumes. Although slight, the pace of accumulation was above its long-run average. In turn, firms continued to hire extra staff. Aggregate employment expanded at one of the strongest rates seen in just under 19 years of data collection. Job creation was stronger at manufacturing companies than at their services counterparts.
