Business confidence increased as orders increased in July

Mumbai: As a result of increased business activities in both manufacturing and services sectors, the country is witnessing an increase in economic activity in the month of July. According to the survey report of HSBC, as per preliminary estimates, the HSBC Purchasing Managers' Index (PMI) for July rose to 61.10 from 60.50 in June, while the manufacturing PMI rose to 58.50 from 58.30.

The preliminary composite PMI for manufacturing and services sectors increased to 61.40 from 60.90.

The index gauges business activity and the report showed a rise in business confidence in July. An index above 50 is considered an expansion in that sector.

The services sector index remained above its long-term average. Companies have become more optimistic in July compared to June.

India is becoming the world's fastest growing economy and has achieved an economic growth rate of more than eight percent in the last financial year. The Reserve Bank has estimated the economic growth rate to be 7.20 percent in the current financial year. The Economic Survey has estimated 6.50 to 7 percent.

Orders from private sector companies have also seen an increase in July. Initial reports also indicate an increase in employment in the manufacturing sector.

Employee recruitment is at an 18-year high. Rising raw material costs have created inflationary pressures.