India's economic performance reached a 14-month peak in June, driven by robust growth in manufacturing and services.

India's economic activity experienced a notable boost in June, as the HSBC Flash Composite Output Index rose to its highest point in 14 months at 61, signifying strong growth beyond the trend in both manufacturing and services. A figure surpassing 50 indicates expansion, and the index has sustained growth for more than three years. According to the survey compiled by Standard and Poor's (S&P) Global, manufacturers were the main drivers of this upturn, supported by increased demand, efficient operations, and investments in technology. The Flash India Manufacturing Purchasing Managers' Index (PMI) improved to 58.4 in June from 57.6 in May, while the output index hit 61.5, the highest level since April 2024. In the services sector, the activity index rose to 60.7 from 58.8 in May, demonstrating strong momentum. The report indicated a notable increase in new export orders, particularly in manufacturing, bolstered by heightened demand from various regions including Asia, Europe, West Asia, and the United States (US). Both sectors saw job growth, although hiring in services experienced a slight slowdown compared to the previous month. While input and output costs continued to rise, the rate of inflation showed signs of easing. Mr. Pranjul Bhandari, Chief India Economist at HSBC, remarked that the combination of robust global demand and increasing backlogs has led manufacturers to seek more workers. Although business sentiment for the upcoming year remained optimistic, it fell to the lowest level in over two years, with manufacturers displaying a slightly greater optimism than service providers.