Financial Insights That Matter
Despite rising only fractionally from 58.1 in March to 58.2 in April, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index showed the strongest improvement in the health of the sector for 10 months.
The headline figure was spurred by faster increases in stocks of purchases, employment and production. Output rose at a sharp rate that was the quickest since June 2024. Sub-sector data showed widespread expansions, with the fastest increase registered at consumer goods makers.
A key factor contributing to the latest improvement in output growth was a sharp rise in new business, according to the release. The rate of expansion was the second strongest for nine months. Respondents attributed growth to better domestic and international demand.
With the sole exception of January, new business from abroad grew to the greatest degree in over 14 years at the start of the fiscal. When reporting sources of demand growth, survey participants cited Africa, Asia, Europe, the Middle East and the Americas.
The substantial improvement in order book volumes occurred despite a marked increase in prices charged for Indian goods. The overall rate of inflation was the highest seen in 11 and a half years. Anecdotal evidence indicated that companies continued to transfer cost increases to clients. Input prices rose at the fastest pace in four months during April, with firms mentioning higher building maintenance, labour, leather, paper, rubber, steel and transportation costs.
Manufacturers continued to enhance their staffing levels in April to meet growing output requirements, according to the release. Exactly 9% of survey participants took on extra workers, with a combination of permanent and temporary contracts reportedly being offered.
Strong optimism regarding output prospects over the coming year was evident in the April data, driven by expectations of demand strength. Marketing efforts, efficiency gains and new client enquiries also underpinned positive forecasts.
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