Robust improvement in Indian manufacturing observed in Aug: S&P Global

Rising from 57.7 in July to 58.6 in August, the seasonally adjusted S&P Global India manufacturing PMI indicated the second-best improvement in the health of the sector for nearly three years.

Firms geared up to handle rising demand by scaling up buying levels and rebuilding their input stocks at the second-strongest pace in 18-and-a-half years of data collection.

On the price front, cost inflationary pressures accelerated but there was a slower uptick in selling charges.

Demand strength was pivotal to August's robust performance, spurring the fastest upturn in new orders since January 2021.

International sales added to manufacturers' total order books. Not only did new export orders increase for the seventeenth month running halfway through the second fiscal quarter, but also to the greatest extent since November 2022, S&P Global said in a release.

Panel members reported having secured new work from clients in Bangladesh, China, Malaysia, Singapore, Taiwan and the United States.

A healthy demand environment and favourable market conditions encouraged Indian manufacturers to step up production. Output rose for the twenty-sixth successive month, and to the greatest extent in just under three years.

To keep production lines running smoothly, manufacturers purchased additional raw materials and semi-finished items in August.

Supplier delivery times shortened for the sixth straight month in August, albeit marginally. Price signals were mixed in the month, with a quicker increase in input costs contrasting with a softer uptick in factory gate charges.

Indian manufacturers reportedly hired a combination of permanent and temporary staff on both part- and full-time bases. New order growth was cited as the main reason behind job creation.

The pace of stock depletion was moderate and softened since July.

Although historically elevated, the overall level of positive sentiment about the year-ahead outlook for production slipped to a three-month low in August due to inflation concerns.

"The PMI results for India painted a vibrant picture of the nation's manufacturing landscape in August. Robust and accelerated increases in new orders and production suggest that the sector looks set to provide a strong contribution to second quarter (fiscal) economic growth,” Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said.

Fibre2Fashion News Desk (DS)