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India’s manufacturing PMI slips to 18-month low of 54.9 in Dec: S&P Global


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New Delhi: India’s manufacturing activities continued to expand in December 2023, but the pace of growth slowed down.

As per data released by S&P Global on Wednesday, the HSBC India Manufacturing Purchasing Managers’ Index (PMI) slipped to an 18-month low of 54.9 in December last year from 56.0 in the previous month.

A PMI print below 50 means contraction, while one above it indicates expansion.

The latest reading was above the long-run series trend but contributed to the lowest quarterly average (55.5) since Q1 fiscal year 2022–23.

The S&P Global survey said that there were softer, albeit sharper, increases in factory orders and output in December, while business confidence in the year-ahead outlook strengthened.

“Encouragingly, input costs rose at the second-slowest rate in nearly three and a-half years, and charge inflation softened to a nine-month low,” it said.

The HSBC India Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers by a panel of around 400 manufacturers. The panel is stratified by detailed sector and company workforce size based on contributions to GDP.

The latest survey noted that new business gains, favourable market conditions, fairs, and expositions collectively induced another sharp increase in manufacturing production during December.

“That said, the rate of expansion softened to the weakest since October 2022, even as it remained above its long-run average. Growth was reportedly curbed by fading demand for certain types of products,” S&P Global said in its findings.

December data showed a twenty-first consecutive increase in international order receipts at goods producers in India. Companies noted gains from clients in Asia, Europe, the Middle East, and North America. New export sales expanded at a moderate pace that was the joint-slowest in eight months.

Commenting on survey findings, Pranjul Bhandari, Chief India Economist at HSBC, said, “India’s manufacturing sector continued to expand in December, although at a softer pace, following an uptick in the previous month. The growth of both output and new orders softened, but on the other hand, the future output index has been rising since November. Rates of increase in input and output prices were broadly unchanged.”

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