Indian manufacturing growth bounces back after December’s dip, shows PMI data

According to the PMI report, input prices rose the most in four months.Rising from a two-year low of 55.0 in December to 55.4 in January, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) – a gauge of overall conditions derived from measures of new orders, output, employment, supplier delivery times and stocks of purchases – indicated a greater improvement in the health of the sector.

According to the PMI, survey participants continued to report that demand buoyancy, new business growth, and tech investment supported production. Output rose sharply, faster than in December.

Similarly, after slowing in December, new orders expanded at a faster rate. Panellists suggested that demand strength and marketing efforts drove sales to domestic and international clients higher.

Pranjul Bhandari, Chief India Economist at HSBC, said: “Indian manufacturing firms saw a rebound in January, driven by increased new orders, output, and employment.””Input costs rose moderately, while the pace of growth in factory-gate prices eased, resulting in slight margin pressure for manufacturers. Despite faster growth in new orders, business confidence remains muted, and expectations for future output have declined to their lowest level since July 2022,” Bhandari said.

The HSBC India Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers. Survey responses are collected in the second half of each month and indicate the direction of change compared to the previous month.