The Indian manufacturing sector recovered some ground lost in May, with the main Purchasing Managers Index (PMI) statistic reported by HSBC on Monday rising to 58.3 from 57.5 in May. The sector's recovery was fueled by strong demand conditions, which prompted increases in new orders, output, and purchase levels.
Furthermore, companies increased employment at the quickest rate in over 19 years of data gathering. Meanwhile, cost pressures eased after May but remained among the strongest in the last two years, prompting enterprises to raise selling prices to the biggest degree since May 2022.
"Growth in the Indian manufacturing sector regained some ground lost in May, with the headline PMI roughly five points above its long-term average. According to the poll, healthy demand conditions drove increases in new orders, output, and purchase levels in June.
A value above 50 in the index represents expansion, while one below 50 represents contraction. The study found that the consumer products business performed particularly well, however significant gains were also observed in the intermediate and investment goods categories.
"In June, Indian manufacturers' sales increased significantly. Strong underlying demand, larger export volumes, and effective advertising all contributed to growth. Firms increased recruiting in response to continuous increases in new order intake, according to the poll.
According to Maitreyi Das, Global Economist at HSBC, the Indian manufacturing sector concluded the June quarter on a firmer footing, boosted by higher new orders and output, which led businesses to expand hiring at the quickest rate.
"Input costs eased marginally in June but remained expensive. Manufacturers were able to pass on greater costs to customers since demand remained strong, resulting in increased profits. While the overall forecast for the manufacturing sector remains favorable, the future output index fell to a three-month low, while it is still above the historical norm," she noted.
According to the poll, new export orders increased significantly again in June, with employers attributing larger inflows of new work from overseas to stronger demand from Asia, Australia, Brazil, Canada, Europe, and the United States.
The June manufacturing PMI fell below the flash estimate of 58.5, while manufacturing production increased for the 36th straight month since July 2021.
