india-s-june-manufacturing-pmi-rises-to-58-3

India’s manufacturing sector saw a notable uptick in June, with the Manufacturing Purchasing Managers' Index (PMI) climbing to 58.3 from a three-month low of 57.5 in May. 

 

The June PMI, comfortably above its long-run average, highlights a recovery in the Indian manufacturing sector, which had faced a dip in May. The report attributes this recovery to buoyant demand conditions, which spurred expansions in new orders, output, and buying levels.

 

Maitreyi Das, Global Economist at HSBC, commented, “The Indian manufacturing sector ended the June quarter on a stronger footing. The headline manufacturing PMI rose by 0.8 percentage points to 58.3 in June, supported by increased new orders and output. Consequently, firms increased their hiring at the fastest pace in over 19 years.”

 

The data showed that firms raised employment at the fastest rate recorded since the data collection began in March 2005. This surge in hiring is indicative of the sector’s robust performance.

 

The input buying activity also rose during the month. While cost pressures receded slightly from May, they remained among the highest in over two years. Manufacturers managed to pass on higher costs to customers, resulting in improved margins.

 

Das added, “Input costs moderated slightly in June but remained at elevated levels. Manufacturers were able to pass on higher costs to customers, as demand remained robust, resulting in improved margins. While the overall outlook for the manufacturing sector remains positive, the future output index receded to a three-month low, albeit remaining above the historical average.”

 

“As a consequence of ongoing increases in new order intakes, firms stepped up recruitment. The rate of job creation was sharp and the strongest seen since data collection started in March 2005. Staff expenses reportedly intensified in June, which coupled with rising material and transportation costs caused another overall increase in operating expenses,” the report noted.

 

Export orders saw a substantial increase, driven by better demand from regions including Asia, Australia, Brazil, Canada, Europe, and the US.