Buoyant demand fuelled a sharp expansion in India’s manufacturing activity in June with companies ramping up hiring at their fastest pace in over 19 years, according to a monthly survey released on Monday.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose to 58.3 in June from 57.5 in May. The reading remained comfortably above the long-run average.

The robust expansion stemmed from a surge in new orders, with manufacturers reporting favourable domestic and export market conditions. This strong performance led to companies to step up recruitment, with the rate of job creation hitting the highest level since data collection began in March 2005.

While cost pressures eased slightly from May, they remained elevated compared with the past two years. Manufacturers responded by raising selling prices at their fastest pace since May 2022, suggesting they were able to maintain margins.

The survey highlighted a positive outlook for the sector, with nearly 29 per cent of respondents expecting output growth in the coming year. Firms expressed confidence in further improvements in demand and order books, buoyed by advertising efforts and increased customer inquiries. However, the overall level of optimism dipped slightly to a three-month low.

Maitreyi Das, global economist at HSBC, said, “The Indian manufacturing sector closed the June quarter on a strong note. The headline PMI rose, supported by a rise in new orders and output. Consequently, firms ramped up hiring at a record pace. The outlook remains positive, although some moderation in confidence was observed.”