India’s Manufacturing Sector Surges:4-Month High in Growth Seen in January

Ira Singh
Khabar Khabaron Ki,03 Feb’24

India’s manufacturing sector has experienced a robust upswing, reaching a four-month high in growth during January as a sharper upturn in new orders boosted output growth amid mild cost inflation,according to a monthly survey released on February 1.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) recovered from an 18-month low of 54.9 in December to 56.5 in January. The latest reading highlighted the strongest improvement in the health of the sector since last September.

In Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction. “India’s final manufacturing PMI showed that manufacturing activity accelerated in January. Current output expanded on robust demand, with domestic orders growing at a faster pace than export orders,” Ines Lam, Economist at HSBC, said.

Mr. Lam further added that “the input price index inched up, but manufacturers were able to pass on some of the cost pressures to consumers, as suggested by the small rise in the output price index.” According to the survey, new orders placed with Indian goods producers rose at a sharp pace in January, and one that was the strongest in four months. Growth was reportedly boosted by marketing efforts and demand buoyancy.

International sales also expanded at a quicker pace. Goods producers reported stronger demand from clients spread across Africa, Asia, Australia, Europe, the Middle East and the Americas.

The positive growth in the manufacturing sector is viewed as a key indicator of the broader economic recovery in India. The survey findings suggest that the resilience of the manufacturing industry is not only driving economic expansion but is also contributing to employment generation, reflecting a positive outlook for the labor market.