Manufacturing PMI Of India Surged To 54.7, Indicating Faster Growth In Demand 

Manufacturing PMI Of India Surged To 54.7, Indicating Faster Growth In Demand
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Stronger gains in output and factory orders and increased growth in overseas sales helped India’s manufacturing sector to grow faster in April than in previous months. 

The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) increased from 54 to 54.7. The further loosening of Covid restrictions also resulted in a demand to continue to strengthen. 

However, the index was somewhat lower than February’s 54.9. For the tenth month in a row, the PMI figures improved overall operational conditions. A number above 50 indicates expansion, whereas a score below 50 indicates contraction.

“The Indian manufacturing PMI remained well in positive territory during April, recovering some of the ground lost in March. Factories continued to scale up production at an above-trend pace, with the ongoing increases in sales and input purchasing, suggesting that growth will be sustained in the near-term,” said Pollyanna De Lima, economics associate director at S&P Global.

On the other hand, inflationary pressures grew as global commodity prices rose in response to Russia’s invasion of Ukraine. Input costs rose quickly in five months, while output charge inflation reached a new 12-month high.

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“A major insight from the latest results was an intensification of inflationary pressures, as energy price volatility, global shortages of inputs, and the war in Ukraine pushed up purchasing costs. Companies responded to this by hiking their fees to the greatest extent in one year,” Lima said.

Lima went on to say that when enterprises continue to share extra cost burdens with their customers, this increase in pricing pressures could weaken demand.

According to the poll, there was a modest increase in employment in April as capacity challenges among Indian manufacturers remained minor, as seen by a marginal increase in backlogs. It went on to say that the vast majority of poll respondents said their workforces had remained constant since March.

“There has been a gradual yet consistent easing in momentum since the beginning of CY22, and high global commodity prices add to downside risks to the growth ahead. Even as India is still leading the Asian emerging markets in PMI, overall business confidence remained subdued by historical standards. It was marred by economic uncertainty and inflation concerns among manufacturers,” said Madhavi Arora, lead economist at Emkay Global.

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