According to a monthly survey, manufacturing activities in India have reached a four-month high in April, driven by robust new business growth, mild price pressures, better international sales, and improving supply-chain conditions. The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) rose to 57.2 in April, the highest it has been this year, up from 56.4 in March. This indicates a faster improvement in the health of the sector. A print above 50 in PMI terms denotes expansion, while a score below 50 indicates contraction.
The survey found that factory orders and production rose at the strongest rates in 2023 so far. More jobs were also created and companies stepped up input purchasing as they replenished their stocks. The increase in new orders was the quickest since December 2022, supported by favourable market conditions, demand strength, and publicity.
Despite higher operating costs linked to fuel, metals, transportation, and some other raw materials, the overall rate of inflation remained below its long-run average. However, charge inflation quickened in April, reaching a three-month high, and matching its long-run average. Only 6% of companies raised their fees since March, while 92% kept them unchanged.
Looking ahead, Indian manufacturers expressed confidence that production volumes would be higher in 12 months’ time, amid demand resilience, client enquiries, orders pending approval, and marketing efforts. Moreover, the overall level of positive sentiment rose since March. Manufacturers are positive towards growth prospects, with optimism improving from March’s eight-month low on the back of contracts pending approval, rising client enquiries, marketing initiatives, and evidence of demand resilience.
The S&P Global India Manufacturing Purchasing Managers’ Index is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 manufacturing companies. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP. Data collection began in December 2005. The PMI data indicated an improvement in overall operating conditions for the 22nd straight month. Companies benefitted from relatively mild price pressures, better international sales, and improving supply-chain conditions. The increase in new orders indicates that Indian manufacturers have abundant opportunities to keep powering ahead.
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