India’s PMI surges in June, steel and services sectors drive economic growth

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NEW DELHI: The manufacturing Purchasing Managers’ Index (PMI) soared in June 2024, driven by robust demand and the highest hiring activity in 19 years, according to an SBI report.

Concurrently, the Eight Core Industries Index expanded by 6.5 per cent year-on-year in the first two months of FY25, buoyed primarily by increased activity in essential sectors such as coal, natural gas and electricity. However, segments like fertilizers and cement witnessed degrowth due to base effects.

Steel demand continued to surge, registering double-digit growth year-on-year, supported by robust demand from sectors like real estate, which saw a significant uptick with home construction across major cities hitting an 11-year high in the first half of the calendar year 2024. This domestic demand surge has bolstered steel production and contributed to overall industrial expansion.

On the other hand, auto sales faced challenges, slowing down due to adverse weather conditions and base effects despite attractive discounts offered by Original Equipment Manufacturers (OEMs). The Federation of Automobile Dealers Associations (FADA) has advised OEMs to adopt prudent inventory management practices to address rising stock levels.

In the services sector, activity continued to set new records, highlighting India’s leadership in digital payments globally. Services sales, particularly in international markets, experienced robust growth, supported by strong domestic demand and low inflationary pressures.

Annual sales growth for IT and non-IT services in private non-financial companies outpaced manufacturers, growing by 5.5 per cent and 7.9 per cent year-on-year respectively in FY24.

Power consumption surged by 9 percent year-on-year in June 2024, reaching 152.4 billion units (BU), driven by prolonged heat waves and increased industrial activity. Peak demand soared to 245.4 gigawatts (GW), indicating heightened usage of cooling appliances during peak hours.

Unified Payments Interface (UPI) transactions continued to hover around the Rs. 20 trillion mark in terms of value in June 2024, underscoring India’s robust digital payment ecosystem and its increasing adoption across various sectors.

The symbiotic relationship between the manufacturing and services sectors is poised to further strengthen India’s economic resilience and growth trajectory in the coming months, bolstered by strategic sectoral alignments and robust domestic demand dynamics.

India’s economic landscape in early FY25 is marked by robust collaboration between the manufacturing and services sectors, as indicated by strong industry performance indicators across various fronts. (ANI)

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