India’s Manufacturing Sector Records Job Growth, December PMI At 56.4

India’s manufacturing sector displayed resilience in December 2024, with employment rising for the tenth consecutive month, according to the HSBC India Manufacturing Purchasing Managers’ Index (PMI). Job creation grew at its fastest pace in four months, with 10% of companies expanding their workforce, reflecting sustained optimism.

The PMI for December dropped slightly to 56.4 from November’s 56.5, marking the year’s lowest reading but remaining above the long-term average of 54.1. Despite signs of moderation in production, new orders, and inventories, the sector showed robust growth.

Employment growth in India’s manufacturing sector underscored confidence among firms. At the same time, post-production inventories declined sharply, with the most significant drop in seven months driven by strong sales volumes. This depletion indicates steady demand and effective stock management.

Economist Ines Lam from HSBC noted, “India’s manufacturing activity ended 2024 with a soft note amidst signs of moderation. The slower rate of new orders suggests weaker growth in future production.”

Export Orders Offset Domestic Slowdown

While domestic order expansion slowed, export orders provided a boost. International demand grew at its fastest pace since July, compensating for weaker domestic sales. Input cost pressures eased, with inflation described as mild by historical standards.

Despite rising container, material, and labour costs, firms leveraged strong demand to increase selling prices, maintaining margins. Advertising efforts and positive client sentiment supported sales, ensuring continued growth in a competitive market.

India’s manufacturing sector closed 2024 on a steady footing, balancing challenges with strategic pricing and sustained international demand.

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