India's manufacturing sector activity improved in the month of March, as growth of factory orders and production quickened to the strongest in three months. With pressure on supply chains subsiding and raw material availability improving, input cost inflation retreated to its second-lowest mark in two-and-a-half years.
According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) surged to 56.4 in March from 55.3 in February, signaling the strongest improvement in operating conditions in 2023 so far. However, the PMI average for the final fiscal quarter (55.7) came in below that recorded in the prior period (56.3 in Q3).
The report noted that ongoing improvements in total sales volumes underpinned another increase in production. Output rose at the quickest pace since last December and one that outpaced its long-run average. Demand resilience also encouraged firms to rebuild their input inventories. Stocks of purchases rose at a sharp rate that was one of the strongest seen in over 18 years of data collection.
As per the report, Indian manufacturers expect improved customer relations, new product releases and advertising to support sales and subsequently production over the course of the coming 12 months. However, the overall level of positive sentiment slipped to an eight-month low due to concerns surrounding competitiveness and general inflation.
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