India's Economic Surge: Record Highs in Export Orders and Employment

India's economic momentum surged in June with the HSBC Flash India Composite Output Index hitting a 14-month high. A marked increase in export orders and employment propelled growth in manufacturing and services sectors. However, while demand surged, cost pressure eased, with firms wary of transferring costs to consumers.

In a robust display of economic vigor, India's industrial and service sectors saw substantial growth with the HSBC Flash India Composite Output Index soaring to 61.0 in June, up from 59.3 in May. This 14-month high signals strong economic expansion, outpacing the long-term average.

Pranjul Bhandari, Chief India Economist at HSBC, highlighted the pivotal role of export orders in driving this growth, particularly within manufacturing. "India's flash PMI indicated strong growth in June," Bhandari noted, as manufacturers scaled up production to meet global demand, bolstering employment figures significantly.

Despite the impressive uptick in demand, cost pressures softened. Input prices rose at the slowest rate in ten months, providing some relief to businesses wary of inflating prices. Meanwhile, optimism among Indian firms remains tempered, but manufacturers maintain a positive outlook on future prospects, despite a slight dip in overall business confidence.

(With inputs from agencies.)