Manufacturing PMI slips to a 12-month low in December

Manufacturing activity in December slipped to a 12-month low on subdued increases in output, new orders and stocks of purchases, a private survey showed.

At 56.4 in December, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) was at a 12-month low and indicated a weaker improvement in operating conditions.

The headline figure was down from 56.5 in November, but remained above its long-run average of 54.1 thereby signaling a robust rate of growth. A reading above 50 indicates an overall increase when compared with the previous month and below 50 denotes a decline.

“India’s manufacturing activity ended a strong 2024 on a soft note amid more signs of a slowing trend, albeit moderate, in the industrial sector,” Ines Lam, an economist at HSBC, said.

“The rate of expansion in new orders was the slowest in the year, suggesting weaker growth in future production. That said, there was some uplift in the growth of new export orders, which rose at the fastest pace since July,” Lam said.

Cost pressures saw a slight decrease, yet the prices that businesses charge for their goods and services remained at historically high levels.

“The rise in input prices eased slightly, wrapping up the year when Indian manufacturers felt the strain of sharp cost pressures,” Lam added.

Firms continued to report that advertising and positive client appetite supported sales. The latest expansion was sharp, though the joint-slowest in a year (equal to September).

The findings indicate that growth rates remain substantial, leading to expansions in buying levels and employment.

Survey participants reported they could secure orders from across the globe but reported slow growth in new export sales.