New Delhi : India’s private sector output witnessed significant uptrend in June as both manufacturing and services sector registered solid rate of expansion, driven by robust order flows and stronger business sentiment, an HSBC survey said.

The headline HSBC Services Business Activity Index was at a 17-month peak of 54.4 in June rising from a modest 50.2 in May, HSBC said adding that “the Modi wave has struck the service sector”. A reading above 50 shows that the sector is expanding, while a reading below 50 depicts that the output in the sector is contracting.

 “After months of subdued activity, the Modi wave has struck the service sector and lifted growth to a 17-month high,” HSBC Co-Head of Asian Economic Research, Frederic Neumann, said.

 Moreover, optimism regarding the output levels in the services sector for the next 12 months remained positive in June, owing to factors such as end of the elections, planned increases in marketing budgets, forecasts of stronger demand and ongoing improvements in India’s economy.

The HSBC India Composite Output Index, which maps both services and manufacturing, rose to a 16-month high of 53.8 in June, up from 50.7 in the prior month.  “New business flows and stronger business sentiment supported the rise. Some of this is simply pent up demand being unleashed,” Neumann added.

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