India’s Economic Activity Sees Fastest Growth in Over a Year, Signals Boost in Business Confidence

India’s economic activity surged in June, recording its fastest expansion in 14 months, according to the latest PMI (Purchasing Managers’ Index) survey. This positive momentum reflects strong demand, rising employment, and growing business confidence across sectors. For Tier 2 cities, this uptick is especially encouraging, as small and mid-sized businesses begin to feel the ripple effects of broader economic growth.

PMI Signals Strong Economic Pulse
The PMI, a key indicator of economic health based on surveys from manufacturing and services firms, showed a significant rise in June. The combined index for manufacturing and services hit its highest level since April last year, indicating robust expansion in both sectors.

This growth suggests that businesses are receiving more orders, production is up, and hiring activity is steadily improving.

Drivers Behind the Growth
Strong consumer demand and rising domestic orders have played a major role in boosting economic activity. While exports continue to face global challenges, India’s internal market has shown resilience. The services sector, including transport, hospitality, and IT support, saw solid momentum, supported by increased client spending and post-summer recovery.

Manufacturers also reported higher output, supported by supply chain improvements and stable input costs.

Tier 2 Cities Playing a Key Role
Cities like Indore, Jaipur, Lucknow, and Coimbatore have seen a visible pickup in local business sentiment. Small-scale industries, logistics providers, and local retailers are reporting higher footfall and more stable demand compared to previous months.

Many Tier 2 cities, once seen as secondary markets, are now emerging as vital contributors to India’s economic activity, thanks to digital expansion, improved infrastructure, and local entrepreneurship.

Job Market Sees Mild Improvement
Employment levels have also shown slight but steady improvement. As businesses ramp up production and services to meet demand, hiring has picked up, especially in sectors like retail, transport, hospitality, and back-end tech support.

This comes as a positive sign for youth and job-seekers in non-metro areas, where job creation often lags behind urban centres.

Outlook Remains Cautiously Optimistic
While the numbers are promising, experts advise cautious optimism. Global uncertainties, inflation concerns, and unpredictable weather patterns could still impact supply chains and cost structures. However, with demand staying strong and business confidence high, the short-term outlook remains upbeat.

Policymakers and industry leaders are now focused on sustaining this growth through targeted support and continued reforms.

Conclusion
India’s economic momentum in June marks a much-needed boost for businesses and workers alike. With growth touching a 14-month high, the signs point toward recovery and renewed stability. For Tier 2 cities, this is an opportunity to capitalise on emerging demand, strengthen local industries, and contribute more significantly to the national economy. The challenge now is to maintain the pace and ensure the benefits reach every corner of the country.