India's manufacturing activity continued its growth momentum in May, signalling the strongest improvement in operating conditions so far since October 2020.
The India Manufacturing Purchasing Managers' Index rose to 58.7 in May compared to 57.2 in April, according to IHS Markit. A print above 50 means expansion, while those below 50 indicate contraction.
"Out of the five PMI sub-components, stocks of purchases showed notable vigour, increasing at an unprecedented pace in May," stated the press release. Monitored companies indicated that better supply-chain conditions and sustained increases in input purchasing boosted inventory growth. According to survey members, ongoing increases in new business and efforts to replenish stocks underpinned the growth in buying levels.
Factory orders increased for the twenty-third month running in May. Firms generally associated the upturn with advertising, demand strength, and a favourable economic climate.
Exports gave impetus to the total new orders in May.
Indian manufacturers scaled up production volumes as a result of growing new orders and favourable market conditions. The latest increase in output was sharp and the fastest in 28 months.
Capacity pressures supported job creation midway through the first fiscal quarter. Moreover, the rate of employment growth improved to a six-month high.
Average cost burdens rose at a moderate rate that was well below their long-run average. In contrast to the trend for input costs, selling prices rose at a solid and quicker rate in May. The rate of inflation accelerated to a one-year high. According to panellists, sustained increases in input costs and a supportive demand environment led them to lift their charges.
Business confidence in growth prospects improved to a five-month high in May. Publicity and demand resilience were among the reasons cited for upbeat forecasts.
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