India's manufacturing industry witnessed a solid growth in March, expanding at the fastest pace in 16 years due to accelerating demand. Hiring increased at the strongest rate in six months too.
The HSBC final India Manufacturing Purchasing Managers' Index, compiled by S&P Global, rose to the highest since February 2008. “The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index™ (PMI) climbed to a 16-year high of 59.1 in March, from 56.9 in February. The notable improvement in operating conditions reflected stronger growth of new orders, output and input stocks as well as renewed job creation,” said S&P.
The stellar performance was complemented by employment that returned to positive territory and firms scaling up buying levels. There was a mild pick-up in cost pressures during March, but customer retention remained a priority for goods producers, who raised their charges to the lowest extent in over a year.
Growth of new orders accelerated to the quickest in nearly three-and-a-half years in March, inflows of new work strengthened, new export orders increased at the fastest pace since May 2020, manufacturing output rise for the 33rd month in March and to the greatest extent since October 2020, growth across consumer, intermediate and investment goods sectors quickened, quantities of purchases increased at the quickest rate since mid-2023, inventories of purchases increased to the second-greatest extent in the survey history, apart from May 2023.
While the outlook for the upcoming year was optimistic, the sub-index eased for a second month to 63.3 as inflation concerns weighed on confidence.
This data is expected to be a boost for the government headed by Prime Minister Narendra Modi, ahead of the upcoming Lok Sabha elections 2024. The Modi government is focusing on manufacturing to improve the economy, which is the fastest-growing among its major peers.