The Purchasing Managers Index measures the direction of economic trends in manufacturing. The manufacturing PMI of India increased to 57.2 in April 2023 from 56.4 in March.
This indicates a fast improvement in the sector. Except for the supplier delivery times, all sub-components of the Purchasing Managers Index contributed to the stronger figures.
Factory orders and production went up at the strongest rates in 2023. Better job opportunities were created, and several companies stepped up input purchasing. This was owing to stock-replenishment efforts.
An analytical view
Pollyanna De Lima, the Economics Associate Director at the S&P Global Market Intelligence, has said that reflecting a quicker expansion in new orders, production growth has taken another step forward in April. Companies benefited from mild price pressures, better international sales, and improved supply-chain conditions.
Pollyanna De Lima said that Indian manufacturers have a lot of opportunities to keep powering further ahead. Capacities were now expanded through the creation of job opportunities and by input buying that was lifted and pre-production inventories that rose.
De Lima further said that at the same time, stocks of the finished goods require replenishing. This is because some orders were fulfilled from warehoused goods. Manufacturers are upbeat about growth. This is with optimism that is improving from March month’s eight-month low on the back of contracts that are pending approval.
New orders that were placed went up at the quickest since December. The output also increased sharply and was most pronounced in 4 months. The manufacturers added to their input inventories in April. Buying levels expanded for the 22nd successive month. As well as expanded at a sharp rate that was strongest since February 2021.
Goods producers now have recorded some marginal increase in outstanding business volumes. The report said the firms sought to expand their capacities by hiring additional workers.
Manufacturers of India were confident. They were confident that the production volumes will be higher in a year.
PMI of India in March
The manufacturing PMI of India had increased from 55.3 in February to 56.4 in March. This data was according to S&P Global India Manufacturing PMI. The report said that March’s Purchasing Managers Index signalled the strongest improvement in operating conditions in 2023. But, the Purchasing Managers Index average for the final fiscal quarter at 55.7 was much lower than what was recorded in the previous period of 56.3 in quarter three.
Pressure on supply chains had subsided. The availability of raw materials had improved. And, the input cost inflation had retreated to its 2nd-lowest mark in 2 and a half years.
Pollyanna De Lima commented that India’s underlying demand for goods remained strong in March. The production continued to expand fast, and firms stepped up their stock-building efforts. Companies reported a lot of capacity among themselves and their suppliers. Also, improved availability of raw materials amongst vendors resulted in lesser delivery times and lower price pressures. The overall input costs went up at the 2nd-slowest rate since September month in 2020.
De Lima further said that the firms tried to benefit from the moderation in inflation by acquiring additional raw materials and semi-finished items. New export orders increased in March month. And, this was with the rate of expansion quicker than February month. Output has gone up quickly since December 2022, outpacing the long-run average.