India Private Sector Growth Eases In June

(RTTNews) - India's private sector activity continued to expand strongly in June, though the pace of growth eased to a three-month low amid cost pressures and softening demand conditions, flash survey results from S&P Global showed on Tuesday.

The HSBC flash composite output index dropped to 57.4 in June from 59.3 in May. However, a score above 50 indicates expansion in the sector.

New orders rose at the weakest pace in three months, which was evident at both manufacturing firms and their services counterparts due to competitive pressures, rising fuel prices, and shortages of gas. New export orders also grew at the slowest rate in 21 months.

The manufacturing PMI dropped to a 3-month low of 54.5 in June from 55.0 in May, and the services PMI fell to 57.4 from 58.0.

In line with moderation in new orders, the rate of job creation in the Indian private sector eased to a 6-month low, and business volumes were broadly unchanged as staffing levels were sufficient for current requirements.

On the price front, input price inflation moderated to a 5-month low in June. The overall inflation was driven by higher chemical, food, fuel, gas, metal, and utility costs. Consequently, selling price inflation was the weakest in six months.

Looking ahead, companies remained positive about output expectations over the year, though the overall degree of optimism was the weakest since January.