India’s manufacturing sector displayed resilience in December 2024, recording its tenth consecutive month of employment growth and achieving the fastest pace of job creation in four months, according to the HSBC India Manufacturing Purchasing Managers’ Index (PMI).
Approximately 10% of surveyed companies reported workforce expansion, reflecting sustained optimism within the sector. Meanwhile, post-production inventories registered their sharpest decline in seven months, driven by strong sales volumes that significantly reduced stock levels.
The PMI for December stood at 56.4, slightly down from November’s 56.5 and below the preliminary estimate of 57.4. While this marked the lowest reading of the year, the figure remained well above the long-term average of 54.1, signaling continued robust growth.
Ines Lam, Economist at HSBC, said, “India’s manufacturing activity ended a strong 2024 on a softer note, showing more signs of a moderating trend in the industrial sector. The rate of expansion in new orders was the slowest of the year, pointing to weaker growth in future production.”
Despite slower domestic demand, the sector witnessed a notable increase in new export orders, which grew at their fastest pace since July. Lam highlighted, “The rise in input prices eased slightly, concluding a year where manufacturers faced sharp cost pressures.”
Factory output and new orders expanded at a more moderate pace, reflecting heightened competition and price pressures. December marked the joint-slowest rate of expansion for 2024, though overall growth remained substantial.
Export orders provided a bright spot, offsetting slower domestic order growth. Firms noted that advertising efforts and positive client sentiment continued to support sales.
Input cost pressures eased to historically mild levels, yet selling prices saw a sharp increase as firms capitalized on strong demand to pass on higher costs. This pricing power, bolstered by favorable market conditions, allowed manufacturers to maintain profit margins despite rising costs for materials, labor, and logistics.
(Inputs from ANI)