In April, India’s manufacturing sector showed the second-fastest pace of improvement in three-and-a-half years, as per the latest HSBC PMI data. The rise in demand from the market has fueled this growth, with firms experiencing a sharp increase in new business intakes and scaling up production. Despite a slight dip compared to the previous month, the HSBC India Manufacturing Purchasing Managers’ Index (PMI) data remained above the neutral mark of 50.0, indicating good health of the sector. The surge in stockpiling was supported by positive expectations from the manufacturers of continued growth in demand.
Manufacturers have hired additional staff to meet the rising demand, marking the quickest pace of job creation since September 2023. While new export orders increased, the domestic market remained the driver of growth, contributing to the high demand for Indian goods. Indian manufacturers are optimistic about higher output levels in the coming year, supported by strong business confidence and expectations of high demand. Despite an uptick in cost pressures, inflation rates remained below long-run averages. Indian manufacturers raised their selling prices, contributing to a three-month high in charge inflation.
Overall, the data reflects a positive outlook for the Indian manufacturing sector driven by robust demand dynamics, strong output growth, and optimistic business sentiment. With sustained improvements in demand and favourable economic conditions, manufacturers are hopeful for continued growth. Advertising and brand recognition efforts are seen as opportunities to further enhance growth prospects. While cost pressures have increased slightly, inflation rates remain below historical averages, indicating a stable environment for the sector.
The strong output growth in April was supported by the significant expansion of input stocks, reaching levels not seen in over 19 years of data collection. This surge in stockpiling was fueled by positive expectations from manufacturers of continued growth in demand, highlighting the overall positive sentiment in the sector. Despite mild pressure on operating capacities, manufacturers remained optimistic about future growth prospects.
April’s data also highlighted the importance of both domestic and external clients in driving growth in the sector, with total new orders rising sharply. The sustained improvements in demand and favorable economic conditions have led to a positive outlook for the Indian manufacturing sector. With strong output growth and optimistic business sentiment, manufacturers are hopeful for continued growth in the coming year. Additionally, efforts in advertising and brand recognition are seen as opportunities to further enhance growth prospects.
