India's manufacturing sector has reached a significant benchmark, recording its strongest growth in 16 years during March. The latest data from the HSBC final India Manufacturing Purchasing Managers' Index (PMI) indicates a surge to 59.1, the highest level since February 2008.
Experts at S&P Global, who compile the PMI, attribute this remarkable performance to several factors. They highlight robust expansions in new orders, output, and input stocks, along with a resurgence in job creation. Additionally, companies have ramped up their purchasing activities, although cost pressures have seen a slight uptick.
Despite this, manufacturers are keen on retaining customers and have only marginally increased their charges.
The growth story extends across various sectors within manufacturing. New orders have seen the quickest rise in nearly three-and-a-half years, with both domestic and export demand picking up pace.
Manufacturing output has soared for the 33rd consecutive month, reaching its highest level since October 2020. This growth trend is evident across consumer, intermediate, and investment goods sectors.
Looking ahead, there's a sense of optimism, although it's slightly tempered by concerns over inflation. The PMI sub-index measuring future expectations dipped slightly for the second consecutive month, reflecting some apprehension among manufacturers.
This data comes as welcome news for the Indian government, particularly Prime Minister Modi, as the country heads towards the 2024 Lok Sabha elections.
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