India’s Dec Manufacturing PMI rises to 26-month high

“Following a promising start to 2022, the Indian manufacturing industry maintained a strong performance as time progressed, wrapping the year with the best expansion in production seen since November 2021,” said Pollyanna De Lima, Economics Associate Director, S&P Global Market Intelligence.

The reading above 50 indicates an overall expansion compared to the previous month and a print below 50 points towards an overall decrease. The index is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.

The survey said demand resilience boosted sales growth in December, with the rate of increase picking up to the quickest since February 2021. International demand for Indian goods also improved, but did so to a lesser extent than in November.

“Demand strength took centre stage among the reasons provided by firms for improvements in many measures. Additional materials were purchased and extra workers hired as companies sought to supplement production and maintain healthy levels of inventories. Input stocks rose at a near-record pace,” De Lima noted.

Overall, new orders from abroad rose at the slowest pace in five months as several companies reportedly struggled to secure new work from key export markets, the survey showed.

With overall demand remaining conducive of growth, manufacturers scaled up production at the end of 2022. The upturn in output was sharp and the best seen since November 2021, it said.

“While some may question the resilience of the Indian manufacturing industry in 2023 amid a deteriorating outlook for the global economy, manufacturers were strongly confident in their ability to lift production from present levels,” De Lima added.

December data pointed to a further increase in buying levels among goods producers. Moreover, the rate of expansion was historically sharp and the strongest since May 2022, the survey said.

Cost pressures remained relatively muted in December, with the overall rate of inflation little-changed from November and the second-slowest since September 2020.

Underlying data indicated that price reductions for some raw materials partly offset increases elsewhere, it said.