India’s private sector activity in May sees 3rd strongest increase since 2010; job creation at 18-year high: Report

| TOI Business Desk | TIMESOFINDIA.COM | May 24, 2024, 13:05 IST

India's private sector activity in May showed significant growth,... Read More

India's private sector activity experienced a significant surge in May, marking the third strongest increase since July 2010, according to preliminary results from a private survey released on Thursday. The survey also revealed the most substantial rise in employment in nearly 18 years.

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According to an ET report, the HSBC Flash India Composite Output Index climbed to 61.7 in May from 61.5 in the previous month, driven by strengthening export demand and an accelerating services sector.

Pranjul Bhandari, chief India economist at HSBC, noted, "The latest data showed strength in new export orders for both sectors, which rose at the fastest pace since the series started in September 2014."

On Growth Path

Although manufacturing sector activity slightly moderated to 58.4 in May from 58.8 in the previous month, marking the slowest pace since February, it remained above the long-term average.

Conversely, the services sector expanded at its quickest rate in four months. The Flash PMI captures responses from 80% of the 800 firms surveyed across the manufacturing and services industries, with final numbers set to be released in the first week of June.

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According to an ET poll, the services sector is expected to have contributed to growth in the fourth quarter of FY24. The latest poll projected Q4FY24 growth at 6.8%, with FY24 growth at 7.8%. The median of 16 forecasts in the ET Poll for FY25 was 6.8%, aligning with IMF estimates.

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The survey also highlighted increased optimism about the future, with the future output index rising by nearly seven points in May. Bhandari stated, "The level of optimism about the year ahead increased to its highest in over 11 years, resulting in firms increasing their staffing levels."

While employment growth has been inconsistent since last year, May showed signs of improvement. The report further noted, "Another factor that supported growth of headcount was an intensification of capacity pressures. Combined across the manufacturing and service sectors, outstanding business volumes rose to the greatest extent in 21 months."

Top 10 Largest Economies In The World

Top 10 Largest Economies In The World: India is all set to become the world’s third largest economy in the coming few years. But what is India’s current ranking in the world’s top 10 economies by nominal GDP size? Where do America and China stand? Did you know that at the current level, the USA's GDP is 7 times that of India? As per the latest IMF data sourced from EY, we take a look the world’s top 10 economies and their projected GDP in the coming years: (AI image)

The United States of America or the USA leads the list of top 10 largest economies in terms of nominal GDP for the year 2023 as per IMF’s estimates. The GDP for 2023 stands at $27,357.825 billion and the expected GDP for 2024 is at $28,781.083 billion. The IMF outlook till 2029 predicts that America will continue to be the world’s largest economy, with an expected GDP of $34,950.012 billion. (AI image)

As of 2023, China’s GDP according to IMF estimates stands at $17,662.041 billion. In 2024, China’s GDP is expected to rise to $18,532.633 billion in 2024, moving to $24,842.337 billion in 2029. China is likely to maintain the tag of the world’s second largest economy. (AI image)

Germany stands at the third rank in the list of world’s largest economies with a GDP of $4,457.366 billion in 2023. In 2024, Germany’s GDP Is likely to be around $4,591.1 billion and in 2029 it will likely be near $5,358.074 billion. According to IMF estimates, Germany would lose the tag of the world’s third largest economy 2027 to India. (AI image)

Japan is the world’s fourth largest economy with a GDP of $4,212.944 billion in 2023. Japan’s nominal GDP has been declining for the last few years and by 2025 it is likely to lose the spot of the 4th largest economy to India. In 2029, Japan’s GDP is expected to be around $4,944.744 billion. (AI image)

India is the fifth largest economy in the world with a GDP of $3,572.078 billion in 2023 according to the latest IMF data. In 2024, India’s GDP is expected to be $3,937.011 billion and in 2025 it will likely become the fourth largest economy with a GDP of $4,339.83 billion. IMF estimates predict that in 2027, India will beat Germany to become the third largest world economy with a GDP of $5,287.04 billion. By 2029, India’s GDP is expected to be around $6,436.653 billion. (AI image)

The United Kingdom or UK, with a GDP of $3,344.744 billion in 2023, is the sixth largest economy in the world. In 2024, its GDP is expected to be near $3495.261 billion and by 2029 the nominal GDP would be around $4661.463 billion, according to IMF projections. (AI image)

France is the world’s seventh largest economy with a GDP of $3,031.778 billion in 2023. Its nominal GDP is expected to grow to $3,130.014 billion in 2024 and reach $3,645.286 billion by 2029, predicts the IMF. (AI image)

With a GDP of $2,255.503 billion, Italy is the 8th largest economy in the world as per IMF’s 2023 data. Italy’s economy is expected to reach a size of $2,328.028 billion in 2024 and $2,625.878 billion by 2029. According to IMF estimates, in 2024 Italy will slip a level in rankings to 9th spot with Brazil moving up. (AI image)

Brazil is currently the world’s ninth largest economy with a nominal GDP of $2,173.671 billion in 2023. In 2024, it is expected to become the 8th largest economy with a GDP of $2,331.391 billion, leaving behind Italy. By 2029, it will likely have a GDP of $3,058.227 billion. (AI image)

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