In April, India’s manufacturing sector experienced a slight slowdown, though it still marked the second-highest improvement in operating conditions over the past three and a half years, fueled by strong demand, as per a monthly survey released on Thursday.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) dipped from 59.1 in March to 58.8 in April, indicating the sector’s robust health, ranking as the second-best performance in three and a half years.
In the language of the Purchasing Managers’ Index (PMI), a reading above 50 signifies expansion, while a figure below 50 suggests contraction.
Pranjul Bhandari, Chief India Economist at HSBC, explained that the sector saw persistent demand driving a continued expansion in output, albeit at a slightly slower pace compared to March.
Indian manufacturers witnessed strong demand both domestically and internationally in April, with total new orders rising sharply. Although new export orders increased notably, the domestic market remained the primary growth driver.
The survey revealed that Indian manufacturers are optimistic about future output levels, with business confidence strengthening in April due to expectations of sustained demand.
To meet the rising demand, manufacturers hired additional staff at the beginning of the fiscal quarter.
Bhandari noted that improvements in suppliers’ delivery times prompted increased purchasing activity, while positive expectations for the future led firms to expand their workforce.
Despite reports of higher material and labor costs, Indian manufacturers raised their selling prices in April to offset these increases, resulting in improved margins, as demand remained strong.
The HSBC India Manufacturing PMI® is compiled by S&P Global through surveys sent to purchasing managers in a panel of approximately 400 manufacturers.
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