Mfg growth sees mild recovery in Apr

Manufacturing sector activity in India witnessed a mild recovery in the growth of new business intakes and production in April, though rates of increase remained the second-weakest in nearly four years.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose from 53.9 in March to 54.7 in April, signalling the second-slowest improvement in overall operating conditions in close to four years. The PMI is a gauge derived from measures of new orders, output, employment, supplier delivery times, and stocks of purchases. In PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

The two largest sub-components of the PMI, new orders and output, rose since March but trailed readings seen in at least three-and-a-half years. Pranjul Bhandari, Chief India Economist at HSBC, said on Monday that the spillovers from the West Asia conflict are becoming more evident, particularly through inflation. Bhandari noted that input costs increased at the fastest pace since August 2022, and output prices rose at the quickest rate in six months.

Survey participants indicated that advertising and demand resilience supported sales and production, but growth was hampered by competitive conditions, the war in West Asia, and a reluctance among clients to approve pending quotes. Meanwhile, new export orders expanded sharply at the start of the first fiscal quarter, reaching a seven-month high. Firms noted better demand from clients in several countries, including Australia, France, Japan, Kenya, mainland China, Saudi Arabia, the UAE, and the UK.                               

-PTI