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India's manufacturing sector PMI hits 31-month high in May

01 Jun 2023 Evaluate

India's manufacturing sector activity improved further in the month of May, hitting 31-month high, with factory orders rising at the fastest pace since January 2021 and companies stepping up input purchasing owing to stock-replenishment efforts.  According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) surged to 58.7 in May from 57.2 in April.

The report further noted that Indian manufacturers scaled up production volumes as a result of growing new orders and favourable market conditions. The latest increase in output was sharp and the fastest in 28 months. Rising inflows of new business exerted pressure on the capacity of goods producers, as seen by another uptick in outstanding business. The rate of backlog accumulation was slight, but the quickest in seven months.

On the inflation front, smoother logistics aided a softer increase in input prices during May. Average cost burdens rose at a moderate rate that was well below its long-run average. In contrast to the trend for input costs, selling prices rose at a solid and quicker rate in May. The rate of inflation accelerated to a one-year high. Sustained increases in input costs and a supportive demand environment led them to lift their charges.


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