India’s manufacturing sector ended the last fiscal with a stellar performance, with the seasonally-adjusted HSBC India purchasing managers’ index (PMI) climbing to a 16-year high of 59.1 in March from 56.9 in February on the back of the strongest increases in output and new orders since October 2020, parallel to the second-sharpest upturn in input inventories in the history of the survey, according to S&P Global.

The notable improvement in operating conditions reflected stronger growth of new orders, output and input stocks as well as renewed job creation.

Employment returned to positive territory and firms scaled 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 least extent in over a year, the New York City-based financial information and analytics company said in a note.

Growth of new orders accelerated to the quickest in nearly three-and-a-half years during March, amid reports of buoyant demand conditions.

Inflows of new work strengthened from both domestic and export markets, the latter reportedly reflecting better sales to Africa, Asia, Europe and the United States. New export orders increased at the fastest pace since May 2022.

Manufacturing output rose for the thirty-third month running in March, and to the greatest extent since October 2020.

Quantities of purchases increased at the quickest rate since mid-2023, and one that was among the strongest in nearly 13 years, as companies sought to build-up stocks in advance of expected improvements in sales.

Inventories of purchases increased to the second-greatest extent in the survey history (behind May 2023).

Pressure on the capacity of goods producers remained mild, as indicated by only a slight increase in outstanding business volumes. Meanwhile, suppliers were generally able to deliver purchased inputs in a timely manner, as signalled by a renewed improvement in lead times.

Despite remaining modest by historical standards, cost pressures were at their highest in five months. Companies reported having paid more for cotton.

Indian manufacturing companies remained confident on an average, with 28 per cent forecasting output growth in the year ahead and 1 per cent expecting a contraction. Planned marketing, new product enquiries and buoyant demand were all cited as reasons for optimism.

The overall level of sentiment remained elevated, but slipped to a four-month low as inflation concerns weighed on confidence.

Fibre2Fashion News Desk (DS)

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