India’s Manufacturing Activity Hit A 16-Year High In March

India's manufacturing sector saw significant expansion in March, marking its quickest growth rate in 16 years, driven by heightened demand.

Additionally, the hiring rate surged to its highest in half a year.

The HSBC final India Manufacturing Purchasing Managers' Index, compiled by S&P Global, rose to the highest since February 2008.

“The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index™ (PMI) climbed to a 16-year high of 59.1 in March, from 56.9 in February. The notable improvement in operating conditions reflected stronger growth of new orders, output and input stocks as well as renewed job creation,” said S&P.

The "stellar performance", according to the report, was complemented by employment that returned to positive territory and firms scaling up buying levels.

There was a mild pick-up in cost pressures during March, but customer retention remained a priority for goods producers who raised their charges to the lowest extent in over a year, the report said.

Growth in new orders accelerated to the quickest in nearly three-and-a-half years in March, helped by buoyant demand as new work inflows strengthened in domestic and export markets. Sales to Africa, Asia, Europe and the United States helped export orders increase at the fastest pace since May 2022.

Growth quickened across the consumer, intermediate and investment goods sectors. The steepest expansion in production was seen at investment goods makers.

While the outlook for the upcoming year was optimistic, the sub-index eased for a second month to 63.3 as inflation concerns weighed on confidence.

The data is expected to boost the Prime Minister Narendra Modi-led government in the lead-up to the 2024 Lok Sabha elections.

With an emphasis on manufacturing, the Modi government aims to enhance the nation's economy, which is outpacing its major counterparts in growth.

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