The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) rose to 57.8 in December from 55.7 in November 2022 , as business conditions improved in two years.
A reading above 50 shows expansion while a score below 50 indicates contraction. December was the 18th straight month of India’s factory activity expansion.
With overall demand remaining conducive of growth, manufacturers scaled up production at the end of 2022 and the upturn in output was sharp and the best seen since November 2021.
“Following a promising start to 2022, the Indian manufacturing industry maintained a strong performance as time progressed, wrapping the year with the best expansion in production seen since November 2021,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
The PMI average for third fiscal quarter was at 56.3, the highest recorded since a year ago. Demand resilience boosted sales growth in December, with the rate of increase picking up to the quickest since February 2021.
As per the survey report, factors that supported sales growth include advertising, product diversification and favourable economic conditions.
Hiring activity was stretched to December, while more inputs were acquired as firms sought to supplement production and add to their inventories.
“Less challenging supply-chain conditions also supported the upturn. Delivery times were reportedly stable, which enabled firms to secure critical materials and boost input stocks,” De Lima said.
On the exports front, new orders rose at the slowest pace in five months.
“While some may question the resilience of the Indian manufacturing industry in 2023 amid a deteriorating outlook for the global economy, manufacturers were strongly confident in their ability to lift production from present levels,” Lima said.
