The manufacturing sector in India closed out FY24 a “stellar performance” in March, a private survey showed, as companies stepped up hiring in response to strong production and new orders.
The HSBC India Manufacturing PMI rose to a 16-year high of 59.1 in March, from 56.9 in February. While this number was the highest since February 2008, it was lower than HSBC’s preliminary estimate of 59.2. A reading of over 50 separates expansion from contraction.
India’s manufacturing output rose for the 33rd consecutive month in the final month as growth quickened across consumer, intermediate and investment goods sectors.
“(This) was on the back of the strongest increases in output and new orders since October 2020, parallel to the second-sharpest upturn in input inventories in the history of the survey,” the firm said in a press release on Tuesday.
Companies in March sought to build-up stocks as they expected improvement in sales, data showed. Capital goods emerged as the brightest area when it came to input buying and stockpiling.
However, survey showed that while Indian companies were optimistic about a few things, the overall sentiment slipped to a four-month low as worries of inflation continued to weigh on their confidence. Cost pressures came out to be the highest in five months. Companies paid a higher price for cotton, iron, machinery tools, plastics and steel.
“India’s March manufacturing PMI rose to its highest level since 2008. Manufacturing companies expanded hiring in response to strong production and new orders. On the back of strong demand and a slight tightening in capacity, input cost inflation picked up in March,” said Ines Lam, Economist at HSBC.
Inventories of purchases jumped to the ‘second-greatest extent’ in the survey history, only behind May 2023.
While the pace of job creation was mild, it was the best since September 2023, with mid-level and full-time employees seeing hiring.
