The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) stood at 57.8 in December, up from 55.7 in November, as business conditions improved to the largest extent in two years.
December PMI data pointed to improving overall operating conditions for the 18th straight month. In PMI parlance, a print above 50 means expansion while a score below 50 indicates contraction.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said, “After a promising start to 2022, the Indian manufacturing industry maintained a strong performance as time went on, with the best expansion in output since November 2021.” ended.”
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Hiring activity was ramped up through December, while firms obtained more inputs to supplement production and add to their inventories.
Demand elasticity boosted sales growth in December. Panelists continued to receive a healthy flow of new business, and increased production to the largest extent since November 2021.
Factors supporting sales growth, according to the survey, include advertising, product diversification and favorable economic conditions.
“Less challenging supply-chain conditions also supported the uptick. Delivery times were reportedly stable, which enabled firms to secure critical materials and boost their input stocks,” Lima said.
On the exports front, new orders grew at the slowest pace in five months, as many companies reportedly struggled to secure new work from key export markets, the report said.
On the year-ahead outlook for production, companies were optimistic. Advertising and a boom in demand were cited as key opportunities for growth prospects.
“Some may question the resilience of the Indian manufacturing industry in 2023 amid a worsening outlook for the global economy, but manufacturers were confident of their ability to ramp up production from current levels,” Lima said.
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On the inflation front, cost pressures remained relatively low in December, with the overall rate of inflation changing little from November and the second slowest since September 2020.
The S&P Global India Manufacturing PMI is compiled from responses to a questionnaire sent by S&P Global to purchasing managers across a panel of approximately 400 manufacturers. The panel has been stratified on the basis of contribution to GDP, broad sector and size of the company’s workforce.
