Decoding HSBC India Manufacturing PMI : An Analysis of December's Economic Landscape

Despite a noticeable drop from 56.0 in November to an 18-month low of 54.9 in December, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index™ (PMI) indicates a marked improvement in sector health. Factory orders and output, while softer, still recorded sharp increases, portraying the sector's resilience. A reading of above 50 Indicates expansion in the economy otherwise, a reading below indicates a sign of contraction.

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Cost Dynamics in Numbers

Encouragingly, input costs rose at the second-slowest rate in almost three-and-a-half years. Charge inflation, marking a nine-month low, further supports this trend. Quantifying these metrics provides a numerical perspective on the sector's ability to manage and mitigate cost pressures.

Quarterly Averages and Global Impact

The quarterly average of 55.5, the lowest since Q1 fiscal year 2022-23, underscores a nuanced scenario. On the international front, the data shows a twenty-first consecutive increase in order receipts from Asia, Europe, the Middle East, and North America, quantifying the global impact on India's manufacturing landscape.

Output and Orders in Detail

Examining the data reveals a sharp increase in manufacturing production in December, albeit at the slowest pace since October 2022. New orders, while still rising, reflect the slowest expansion in a year and a half. Numerical precision sheds light on the challenges and opportunities within the output and order dynamics.

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Employment Metrics and Capacity Analysis

Employment stability is quantified by the seasonally adjusted index fractionally above the 50.0 no-change mark. A marginal uptick in outstanding business volumes reflects a lack of pressure on manufacturers' capacity.

Inventory Trends and Optimistic Projections

Numeric insights showcase an increase in input holdings alongside a decline in finished product inventories, attributed to fulfilling warehoused orders. The sustained growth in buying levels, though slightly slower, brings optimism. Quantifiable projections for the year ahead highlight the factors driving business confidence.


In December, HSBC's India Manufacturing PMI reported robust growth at 54.9 (18-month low), with notable increases in factory orders and output. Input costs rose at the second-slowest rate in over three years, reaching a nine-month low in charge inflation. Despite a quarterly average dip to 55.5 (lowest since Q1 FY 2022-23), the sector showcased adaptability. New orders expanded at the slowest pace in 18 months, but international orders grew for the twenty-first consecutive month. Stable employment, marginal upticks in business volumes, and an optimistic year-ahead outlook highlight resilience. India's manufacturing sector remains strategically poised with rising input holdings and declining finished product inventories amid evolving challenges.


Also Read: Core Sector Growth Dips to 7.8% in November, Marking a Six-Month Low