Manufacturing growth hits 6-month high in Jan on export demand

Another positive finding in the HSBC survey was that job creation remained not just good but the highest in the past 20 years.
India's manufacturing PMI at 6-month high on robust demand
India's manufacturing PMI at 6-month high on robust demand
Updated on
2 min read

Rising exports drove up the manufacturing sector activity in January, with the purchasing managers index (PMI) for the month surging to a six-month high of 57.7, which though is marginally lower than the initial forecast of 58, shows a private survey.

Another positive note is that job creation remained not just good but the highest in the past 20 years, since when data collection started, HSBC said Monday. The survey also indicated falling input prices and better price realisation from output.

The rate of expansion was the quickest since last July and outpaced its long-run average. The figure had plunged to a 12-month low of 56.4 in December, down from 56.5 in November, even as it remained above its long-run average of 54.1 thereby signalling a robust rate of growth, the report said.

“Domestic and export demand were both strong, supporting growth in new orders,” said Pranjul Bhandari, chief economist at HSBC India.

The index, prepared by S&P Global for HSBC,  is based on the responses from purchasing managers of 400 manufacturing companies. A reading above 50 points to an expansion, while below 50 indicates a contraction.

Robust sales and upbeat forecast drove recruitment at the start of the new year leading to an best employment expansion in nearly 20 years.

“The employment PMI suggested robust job creation in the manufacturing industry, as the index increased to its highest level since the series was created 20 years ago,” said Bhandari. Underlying data show that strong job creation in recent months enabling companies to stay on top of their workloads.

 “Another positive is easing of prices. Input cost inflation eased for the second month, relieving pressure on companies to raise final output prices,” she said.

According to the report, input costs increased in January amid reports of greater outlays on freight, labour and materials. However, the rate of inflation was modest overall, and the weakest since February 2024.

Prices charged on goods rose at the slowest pace in four months in January, albeit one that was marked and above the long-run series average. Survey participants said hikes to selling prices were supported by positive client appetite.

Firms were successful in their efforts to lift inventories as suppliers were able to deliver materials in a timely manner, she said, adding vendor performance improved by the greatest extent in eight months, while accumulation in input stocks was the fastest since October 2024.

The survey report found that capacity pressures among manufacturers in India remained mild, as indicated by the fractional increase in outstanding business volumes.

Related Stories

No stories found.

X
The New Indian Express
www.newindianexpress.com