India’s manufacturing PMI eases in March amid global disruptions, job growth remains strong
New Delhi: India’s manufacturing PMI eased to 53.9 in March as disruptions linked to the conflict in the Middle East are reverberating through the global economy and weighing on Indian manufacturers, the HSBC Flash India PMI data showed on Thursday.
Firms also faced an intensification of cost pressures, the steepest since August 2022. That said, companies mostly absorbed added expenses, as indicated by a modest uptick in selling charges that was the least pronounced in two years, according to the PMI data compiled by S&P Global.
Elsewhere, the latest results also showed that attempts to raise contingency stocks supported job creation and input buying growth.
“Output and new orders slowed noticeably, signalling softer demand and greater uncertainty. Meanwhile, input costs rose sharply across a broad range of items, including aluminium, chemicals and fuels. For now, firms appear to be absorbing much of the increase, keeping output prices relatively contained,” said Pranjul Bhandari, Chief India Economist at HSBC.
March data saw input prices increase to the greatest extent in over three-and-a-half years. Aluminium, chemicals, fuel, jute, leather, fabric, oil, rubber and steel were some of the items reported to be up in price, the report noted.
Moreover, Indian manufacturers continued to purchase additional materials for use in production processes and to add to inventories.
“The overall rate of growth slowed to a three-month low, but was historically strong. When explaining the latest upturn, panellists remarked on sales growth as well as their efforts to ensure smooth operations and uninterrupted supply,” said the report.
Notably, suppliers to the Indian manufacturing economy were comfortably able to deliver materials in a timely manner, as indicated by a stronger improvement in vendor performance.
Encouragingly, Indian manufacturers registered the strongest expansion in external sales since last September, with gains noted from clients in Australia, Brazil, Canada, mainland China, Europe, Japan, the Middle East, Turkey and Vietnam for example.
“They also raised employment to the greatest extent in seven months and became more optimistic towards the year-ahead outlook for production,” said the report.