New Delhi, Feb 3 (PTI) – India's manufacturing sector kicked off 2025 on a robust note, reaching a six-month high in January, propelled by the sharpest surge in export orders in nearly 14 years, according to a survey released on Monday.
The HSBC India Manufacturing Purchasing Managers' Index (PMI) climbed to 57.7 in January, rebounding from December’s one-year low of 56.4. This growth was fueled by a remarkable increase in new export orders, marking the fastest acceleration since February 2011.
In PMI terminology, a reading above 50 indicates expansion, while a score below 50 signals contraction.
Strong Domestic and Export Demand Boosts Growth
Commenting on the latest data, Pranjul Bhandari, Chief India Economist at HSBC, highlighted the strength of both domestic and export demand, which significantly contributed to the growth in new orders.
Manufacturers cited improved domestic demand and increased international sales as the key drivers behind the substantial surge in new orders. As a result, production volumes also saw a sharp uptick, recording the fastest growth rate since October 2024.
Looking ahead, business confidence remains strong, with nearly 32% of firms expecting growth, while only 1% foresee a decline in output. The optimistic outlook is attributed to robust customer demand, strong economic conditions, and strategic marketing efforts.
Job Creation and Price Trends
The upbeat market conditions encouraged manufacturers to expand their workforce. The survey reported that employment in the manufacturing sector surged to its highest level since the series' inception, indicating strong job creation at the start of the fourth quarter of the fiscal year.
Bhandari also noted that input cost inflation eased for the second consecutive month, providing relief to manufacturers from raising final output prices despite strong demand.
On the pricing front, cost pressures weakened to an 11-month low, yet selling prices continued to rise moderately due to buoyant demand.
Despite increased production, capacity pressures remained mild, thanks to sustained job creation that enabled companies to efficiently manage their workloads.
The HSBC India Manufacturing PMI, compiled by S&P Global, is based on responses from approximately 400 purchasing managers across the manufacturing sector.
This latest report underscores India's resilient manufacturing growth, driven by strong domestic and export demand, a positive economic outlook, and an expanding workforce.
