Manufacturing PMI climbs to 16-year high in March

Manufacturing activity in March rose to a 16-year high as companies stepped up hiring amid robust production and increasing new orders, the HSBC India Manufacturing Purchasing Managers Index showed.

The seasonally adjusted index climbed to 59.1 in March, up from 56.9 in February.

The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month and below 50 an overall decrease.

“India’s March manufacturing PMI rose to its highest level since 2008. Manufacturing companies expanded hiring in response to strong production and new orders. On the back of strong demand and a slight tightening in capacity, input cost inflation

picked up in March,” Ines Lam, an economist at HSBC, said.

The month saw the strongest increases in output and new orders since October 2020, “parallel to the second-sharpest upturn in input inventories in the history of the survey,”

The notable improvement in operating conditions reflected stronger growth of new orders, output and input stocks as well as renewed job creation, the survey said.

Growth of new orders accelerated to the quickest in nearly three-and-a-half years, amid reports of strong demand. Work orders strengthened from domestic as well as export markets, with sales to Africa, Asia, Europe and the US perking up as new export orders rose at the fastest pace since May 2022.

The pace of job creation was slow, but the best since September 2023, the survey said, highlighting the hiring of mid-level and fulltime employees.

The burst in manufacturing activity came despite surging prices of raw materials as cost pressures were at their highest in five months. Companies reported having paid more for cotton, iron, machinery tools, plastics and steel.

The HSBC India Manufacturing PMI® is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.