India's manufacturing sector activity expanded at a slower pace in the month of December, hitting a 12-month low and indicating a weaker improvement in operating conditions. Although new export sales rose at a slower rate than total new business, the pace of growth for the former strengthened as firms were able to secure international orders from across the globe. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 56.4 in December as against 56.5 in November.
With container, material and labour costs reportedly rising since November, Indian manufacturers registered another increase in overall expenses. Having eased since the previous month, the rate of input price inflation was moderate by historical standards. Selling prices rose to a greater extent than cost burdens, and one that was stronger than seen on average in the near 20-year series history.
The survey report further stated that ongoing improvements in new work intakes prompted manufacturing companies in India to purchase additional inputs for use in production processes. The rate of growth remained above its trend, despite being the second-slowest in 2024 (faster only than in November). With regards to input inventories, purchasing growth and shorter lead times underpinned another monthly increase. The rate of accumulation was sharp, albeit the weakest since December 2023.
Looking to 2025, Indian manufacturers were confident of a rise in output. Optimism reflected advertising, investment and expectation of favourable demand. Sentiment was nevertheless curbed by concerns around inflation and competitive pressures.
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