The Aryavarth Express
Agency (New Delhi): India’s manufacturing sector witnessed a remarkable upturn in March, reaching a zenith not seen in the last 16 years. This surge was propelled by the most substantial boost in production and new orders recorded since October 2020, spurred by vibrant demand, according to a monthly analysis released on Tuesday.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) ascended to an unprecedented 59.1 in March, up from 56.9 in February. This leap indicates an intensified expansion of new orders, production, input inventories, and the resurgence of job opportunities.
In the terminology used by the Purchasing Managers’ Index (PMI), any figure above 50 signifies growth, whereas a value below 50 signals a reduction in activity.
“March saw the Indian manufacturing PMI reach its pinnacle since 2008. In light of robust production and new order levels, manufacturing entities augmented their workforce. Aided by vigorous demand and a slight squeeze in capacity, the inflation of input costs escalated in March,” stated Ines Lam, an Economist at HSBC.
The manufacturing output has been on an upward trajectory for the 33rd consecutive month in March, marking the most significant rise since October 2020. This acceleration was observed across the consumer, intermediate, and investment goods sectors.
The survey highlighted a notable increase in the influx of new business, both from domestic and international markets. New orders from abroad saw the most rapid increase since May 2022.
Purchases were ramped up at the fastest pace since mid-2023, a move among the most vigorous in nearly 13 years, as firms aimed to amplify their stocks in anticipation of projected sales improvements.
Regarding employment, manufacturers in India resumed hiring in March, following a period of stable payroll numbers in the preceding two months. Although the increase in jobs was modest, it represented the most significant rate of job creation since September 2023.
Despite being modest by historical comparisons, cost pressures reached a five-month peak. Firms reported higher expenses for materials such as cotton, iron, machinery tools, plastics, and steel.
Nevertheless, prioritizing customer retention, producers increased their prices at the lowest rate in more than a year.
Looking ahead, the sentiment within the Indian manufacturing sector remains optimistic on average. About 28 percent of companies anticipate growth in output over the coming year, with only 1 percent expecting a downturn. Though the overall confidence level remained high, it dipped to a four-month low due to concerns over inflation. The HSBC India Manufacturing PMI is orchestrated by S&P Global, gathering insights through questionnaires sent to purchasing managers across approximately 400 manufacturing firms.