India’s Manufacturing PMI Climbs to 4 Month High on Strong Output and New Orders

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On Monday, the manufacturing sector in India experienced its quickest expansion so far this year due to a boost in both factory orders and production, according to a private survey released.

The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) increased to 57.2 in April from 56.4 in the previous month, with all sub-components of the PMI making a more substantial contribution to this month’s figure.

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Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, stated that in April, production growth advanced further due to a strong and accelerated expansion in new orders. Additionally, companies experienced mild price pressures, improved international sales, and better supply-chain conditions, resulting in benefits for them.

Indian manufacturers are expected to continue to grow as they have ample opportunities. In April, new orders and output both grew at the fastest pace since December, which led to an increase in job creation and input buying. Firms resumed hiring in April after a decline in March.

Foreign demand expanded at the quickest rate in four months in April, and there was a notable improvement in optimism among manufacturers. Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said that manufacturers are positive about the growth prospects, citing reasons such as rising client inquiries, contracts pending approval, marketing initiatives, and evidence of demand resilience. The optimism had improved from March’s eight-month low.

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In April, input costs in the manufacturing sector in India increased at a faster pace, but firms were able to pass on some of that burden to customers due to improving demand. As a result, it is unlikely that retail inflation will slow down significantly. Despite higher operating costs linked to fuel, metals, transportation, and some other raw materials, the overall inflation rate remained below its long-run average, although it quickened since March. The level of positive sentiment in the sector increased since March.

Shruti Rag