According to data released on April 2, India’s manufacturing activity continued to grow in March, with the HSBC Purchasing Managers’ Index (PMI) for the sector reaching its highest level in 16 years at 59.1.
Parallel to the second-sharpest increase in input inventories in the survey’s history, the HSBC India PMI surged to a 16-year high, driven by the largest gains in output and new orders since October 2020.
“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.”
Ines Lam, Economist at HSBC
According to PMI data released on April 2, amid reports of strong demand conditions, growth of new orders rose to the fastest pace in nearly three-and-a-half years during March.
Both domestic and international markets saw a rise in the amount of new work coming in; the latter is said to have been driven by increased sales to Europe, Asia, Africa, and the US. According to index compiler S&P Global, the rate of growth in new export orders was the fastest since May 2022.
The fastest rate of increase in buy quantities since mid-2023—and among the strongest in almost 13 years—occurred as businesses strove to accumulate inventory ahead of anticipated gains in sales.
Consequently, purchasing inventories rose to the second-highest level in survey history (after May 2023). According to the index compiler, capital goods was the most promising sector in terms of stockpiling and purchasing inputs.
