India Manufacturing PMI Rises To 55.0 In May, Hits Three-Month High: HSBC PMI

New Delhi, Jun 1 (KNN) India's manufacturing sector recorded stronger growth in May, supported by higher domestic demand, rising output and increased purchasing activity, according to the latest HSBC India Manufacturing Purchasing Managers' Index (PMI) by S&P Global.
 
The seasonally adjusted manufacturing PMI rose to 55.0 in May from 54.7 in April and exceeded the earlier flash estimate of 54.3, indicating the strongest improvement in operating conditions in three months.
 
Manufacturers reported faster growth in both new orders and production, driven largely by demand in the domestic market. Intermediate and capital goods producers recorded stronger expansions, while growth among consumer goods manufacturers moderated.
 
Export Orders Expand Despite Slower Pace
 
Survey participants attributed the increase in activity to robust demand conditions, infrastructure-related projects and new business wins.
 
Export orders also expanded during the month, although at a slower pace than domestic orders. Companies reported stronger sales from markets across Asia, Europe, Kenya, Nigeria and the Middle East.
 
Input Costs Remain Elevated; Firms Build Inventories
 
Despite the growth momentum, input cost pressures remained elevated. Firms cited higher expenses for energy, fuel, transportation and raw materials, with input price inflation reaching its second-highest level since April 2022.
 
Manufacturers responded by increasing purchasing activity, with buying levels rising at the fastest pace in three months. Many firms also built contingency inventories, resulting in a stronger accumulation of pre-production stocks.
 
Stocks of finished goods increased for a second consecutive month, with the pace of inventory growth reaching its highest level in over a decade as production outpaced demand.
 
Employment Grows As Business Confidence Stays Positive
 
Employment in the manufacturing sector continued to expand during May, reflecting higher production requirements, although the pace of job creation eased slightly from April.
 
Business sentiment remained positive, supported by expectations that cost pressures may ease later in the year. Companies also cited advertising efforts and strong order pipelines as factors underpinning confidence in future growth.
 
(KNN Bureau)