New Delhi, April 23: India’s manufacturing sector began the new financial year on a stronger note, with the HSBC Flash India Manufacturing PMI rising to 55.9 in April from 53.9 in March, signalling a faster improvement in factory conditions and stronger momentum in output and new orders. A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction.
The April data showed that manufacturing led the broader recovery in India’s private sector after growth had moderated in March amid disruptions linked to the Middle East conflict. The Manufacturing PMI Output Index climbed to 59.1 from 55.7, showing a sharper rise in production activity, while goods producers also reported faster growth in new orders compared with service providers.
The overall private sector picture also improved. The HSBC Flash India Composite PMI Output Index rose to 58.3 in April from 57.0 in March, indicating a sharp rate of expansion across manufacturing and services. Services activity continued to grow as well, with the Services PMI Business Activity Index increasing to 57.9 from 57.5, though the acceleration was stronger on the manufacturing side.
A key driver of the improvement was stronger domestic demand. Survey participants pointed to better demand conditions, higher inflows of new work, capacity expansion and technology investment as factors supporting business activity. New orders rose at a quicker pace than in March and remained historically strong, giving factories the confidence to raise production and purchasing activity.
Export trends, however, were mixed. Manufacturing exports expanded at the fastest pace in nine months, while service export growth slowed to its weakest level in just over a year, reportedly due to the continuing impact of the Middle East conflict. As a result, overall new export business across the private sector rose at a softer pace than in March.
The data also pointed to continued cost pressure. Companies reported higher expenses for fuel, gas, oil, raw materials, transportation and inputs such as chemicals, food, jute, leather, metals and rubber. While overall input cost inflation eased from March, it still remained historically high, and manufacturers in particular saw price pressures intensify. Firms raised selling prices again, but the increase in output prices was lower than the rise in input costs.
Employment remained a positive signal in the survey. Hiring across India’s private sector increased further in April, with job creation reaching a 10-month high. Manufacturing firms recorded a stronger rise in employment than services firms, supported by growing business requirements, expansion plans and optimism about future output.
Another important signal came from inventory behaviour. Manufacturers built buffer stocks to protect themselves against supply-side uncertainty. Finished goods inventories rose for the first time in six months and at the fastest pace since May 2015, while input inventories also increased as companies raised purchasing volumes.
Overall, the April PMI numbers suggest that India’s manufacturing engine is regaining speed after a softer March. Stronger output, new orders, hiring and export demand from goods producers point to a resilient industrial cycle, although elevated input costs and geopolitical uncertainty remain key risks for companies in the months ahead.
Sources:
https://www.pmi.spglobal.com/Public/Home/PressRelease/34a8ea5e72344d67b53be4272346e171
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