Manufacturing PMI falls from 54.7 in April to 54.6 in May 

India’s manufacturing PMI saw a minor downfall from 54.7 in April to 54.6 in May. The figure indicates a sustained recovery in the sector, according to the rating agency S&P Global. As per the rating agency, demand showed signs of resilience and improvement despite surge in selling prices. It also implied a sizeable uptick in growth of new orders for exports, sharpest since April 2011.  

S&P also said that the sector’s growth steadied in India on account of new orders and production increasing at similar rates as those registered in April. Sustained improvements in demand and relaxations in COVID-19 restrictions also contributed to the rise in production in May.  

It added, “Companies were able to secure new work despite lifting selling prices at the fastest rate in over eight-and-a-half years as additional cost burdens continued to be transferred to clients. Total sales were boosted by a substantial upturn in international orders, the strongest in over 11 years.” 

Due to rise in production and improvements in sales, manufacturing sector jobs picked up in May. Given the rise in manufacturing sector jobs, employment growth rate picked up to the strongest since January 2020.  

While manufacturing sector saw massive growth on the production, sales and jobs front, it was also marred by rising input costs and inflation. Input costs rose for the 22nd month in May with sectors like electronic components, energy, freight, foodstuff, metals and textiles facing the brunt.  

S&P Global Market Intelligence Economics Associate Director Pollyanna De Lima said, “There was little movement in the rate of input price inflation during May, which remains historically high, but output charge inflation surged to its highest in over eight-and-a-half years as companies continued to transfer additional cost burdens to their clients.”