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India's Manufacturing Sector Surges To 16-Year High In March: PMI Report

Updated: Apr 02, 2024 01:17:03pm

India's Manufacturing Sector Surges To 16-Year High In March: PMI Report

New Delhi, Apr 2 (KNN) The HSBC India Manufacturing Purchasing Managers' Index (PMI) soared to a 16-year high of 59.1 in March, up from 56.9 in February, marking the highest reading since February 2008. A PMI reading above 50 indicates expansion in the manufacturing sector.

This stellar performance was driven by the strongest increases in output and new orders since October 2020, according to the private survey.

Companies responded by stepping up hiring to meet the robust demand, with job creation rising to the highest level since September 2023, particularly for mid-level and full-time positions.

The surge in new orders prompted manufacturers to actively build up inventories, with input stockpiling reaching the second-highest level in the survey's history, only surpassed by May 2023. The capital goods sector led the way in input buying and stock accumulation.

However, the impressive growth was accompanied by intensified cost pressures, as input price inflation accelerated to a five-month high in March. Manufacturers faced higher prices for key inputs like cotton, iron, machinery tools, plastics, and steel.

While overall business sentiment remained positive, concerns over persistent inflation weighed on confidence levels, causing the optimism index to slip to a four-month low.

India's manufacturing sector has now witnessed 33 consecutive months of expansion, with the latest data highlighting the sector's resilience amid strong domestic and international demand.

Nonetheless, policymakers will be closely monitoring the impact of rising input costs on the industry's growth trajectory.

(KNN Bureau)


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