India’s private sector activity surged in June 2025, reaching its highest growth rate in 14 months, as per the HSBC India Flash Composite Purchasing Managers Index (PMI). The index climbed to 61 from 59.3 in May, reflecting robust economic momentum in manufacturing and services.
Why in News?
- HSBC India Flash PMI for June 2025 reports a substantial rise in business activity.
- New domestic and export orders, particularly in manufacturing, drove the growth.
- This marks the 47th consecutive month of expansion, showcasing India’s resilience in the face of global economic fluctuations.
What is the Composite PMI?
- Average of Manufacturing PMI and Services PMI.
- Above 50 indicates expansion, below 50 indicates contraction.
PMI June 2025 Reading
- Composite PMI: 61 (highest since July 2024)
- Previous Month (May 2025): 59.3 (revised downward)
- Growth observed in manufacturing and services, with manufacturing leading the trend.
Key Highlights
Drivers of Growth
- Surge in New Orders driven by domestic and international demand.
- Strong performance in manufacturing exports boosting the sector.
- Tech Investments and Efficiency Gains contributing to productivity growth.
- Significant Employment Surge with strong job creation in manufacturing.
Price & Capacity Trends
- Input and Output Prices rising but at slower rates.
- Backlogs of Work increasing above the long-term average.
- Capacity Pressure persisting, leading to the highest hiring rate in manufacturing.
Employment Growth
- Companies hiring full-time and part-time staff.
- Manufacturing witnessing a peak in employment growth.
- Services sector hiring slightly softened compared to May.
Summary/Static Details
- Why in the news? India’s Private Sector PMI Hits 14-Month High in June 2025
- Flash Composite PMI (June 2025): 61 (up from 59.3 in May)
- Sectoral Leaders: Manufacturing > Services
- PMI Above 50 for Consecutive Months: 47 months
- Drivers of Growth: New orders, export demand, tech investment
- Price Trends: Input/output prices rising, but at softening rates
Key Takeaways for Competitive Exams
- Understanding the Composite PMI and its significance for economic analysis.
- Recognizing the drivers of growth in the private sector, such as new orders and export demand.
- Being aware of employment trends and capacity pressures in different sectors.
- Exploring the impact of price trends on business activities and decision-making.
