The HSBC final India Manufacturing Purchasing Managers’ Index, compiled by S&P Global, fell to 56.4 – the weakest since December 2023 – little changed from November’s 56.5 but below an early estimate that showed a rise to 57.4.
Still, manufacturing output has shown sustained expansion with the index remaining above 50, which separates growth from expansion, for the past three-and-a-half years.
“India’s manufacturing activity ended a strong 2024 with a soft note amidst more signs of a slowing trend, albeit moderate, in the industrial sector,” said Ines Lam, economist at HSBC.
“The rate of expansion in new orders was the slowest in the year, suggesting weaker growth in future production.” While both output and new orders – a key gauge for demand – continued to rise last month, the improvement slowed. That said, international conditions improved helping exports grow at the fastest rate in five months thanks to firmer demand from Asia, Australia, Europe and the Americas.
Manufacturing firms continued to hire additional staff for a 10th straight month. December marked the fastest rate of jobs growth since August.
Meanwhile, goods producers took advantage of a slower rise in costs by passing on some of the burden to clients with the output prices sub-index falling less in December than input prices. S&P Global said demand resilience supported pricing power.
“The rise in input prices eased slightly, wrapping up the year when Indian manufacturers felt the strain of sharp cost pressures,” added Lam.
However, business sentiment for the year waned, curbed by inflation concerns and competitive pressures while the outlook cooled from November’s six-month high.
