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India Private-Sector Extends Robust Expansion in May: PMI Report

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India Private-Sector Extends Robust Expansion in May: PMI Report

Despite Middle East turmoils, rising crude prices and tempered exports, India's private-sector sustained a robust expansion in May, in both its factory and service sectors, reported S&P Global on Thursday.

India's flash composite purchasing managers index (PMI), a combination of the nation's manufacturing and service sectors, logged at 58.1 in May, off marginally from 58.2 in April, but still striking well above the 50-mark that separates growth from contraction, reported S&P Global, citing its monthly survey.

Although some new business orders waned modestly, the May PMI results "signaled another marked expansion in private sector activity," said S&P Global. India's composite PMI has registered in positive territory since the end of the pandemic era, in 2022.

India's flash manufacturing PMI declined to 54.3 in May from 54.7 in April, while the flash manufacturing PMI output index slipped to 56.6 from 56.9.

While both manufacturing PMIs pointed to expansion, the May results were among the weakest sector reports in nearly four years, said S&P Global.

In contrast, India's flash PMI for services posted at 58.9 in May, inching up from 58.8 in April and indicating a "pick up in growth" in that sector, added the business research outfit.

India's private sector managers did report rising cost of operation in May, and felt unable at times to boost prices to compensate, due to competitive pressures.

"Survey participants reported higher (input) prices for energy, food, fuel, gas, iron, leather, oil, plastics, rubber, steel and transportation," said S&P Global. "Although Indian companies tried to cover increases in cost burdens by lifting selling prices, they did so with a greater degree of caution."

India's sales in global markets were higher, but decelerating in May. "There was a notably softer expansion in new export orders

across India's private sector economy in May, the weakest in

19 months," said S&P Global.

Despite challenges, "business confidence remained strongly positive in May, with the overall level of positive sentiment remaining above its long-run average despite retreating to a three-month low," added S&P Global.

The flash India PMI was compiled by S&P Global from surveys received from 400 manufacturers and 400 service providers from May 8 through May 18.

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