India's Manufacturing PMI Dips to 58.8 in April from March's 16-Year High

Manufacturing PMI: India's manufacturing sector experienced a slight downturn in April, following remarkable performance seen in March when it hit a 16-year high. HSBC final India Manufacturing Purchasing Managers' Index, compiled by S&P Global, dropped to 58.8 in April from 59.1 in March.

Despite this decline, PMI still indicated a strong improvement in sector's health, marking second-best reing in 3.5 years. It remained comfortably above neutral mark of 50.0 and surpassed its long-run average of 53.9.

Indian manufacturing sector has kicked off first fiscal quarter with remarkable vigour, according to HSBC India Manufacturing Purchasing Managers' Index (PMI). Operating conditions saw second-fastest improvement in three-and-a-half years, propelled by buoyant demand. This surge in demand translated into sharp increases in new business intakes, prompting firms to ramp up production levels. As a result, buying activity soared to a ten-month high, with input stocks reaching levels not seen in over 19 years.

expansion of raw material stocks, supported by increased purchasing, was a notable highlight, alongside improved supplier performance. Both domestic and external demand for Indian goods remained strong, with total new orders experiencing significant growth.

Business confidence received a boost as firms expanded staffing levels, anticipating continued positive demand trends. Despite a modest uptick in input costs driven by higher raw material and labour costs, inflation remained below historical averages. However, firms mitigated se cost pressures by passing m onto consumers through higher output charges, resulting in improved margins.

Export orders also saw an uptick, albeit at a softer rate compared to domestic sales, underscoring resilience of domestic market. Looking ahe, Indian manufacturers are optimistic about higher output levels and expect demand to remain buoyant.

To meet growing demand, ditional staff were hired at fastest pace since September 2023. While cost pressures intensified, inflation remained below its long-run average. Responding to higher costs, manufacturers raised selling prices, with rate of charge inflation reaching a three-month high.