India's PMI Manufacturing - May 2024

India's manufacturing sector showed resilience in May 2024, remaining firmly in expansion territory despite a slight dip in growth momentum. The HSBC India Manufacturing Purchasing Managers’ Index™ (PMI®) fell to 57.5 from 58.8 in April. 

Although this indicates a slower pace, the index remained well above its long-run average, suggesting a substantial improvement in the sector's health.A reading above 50 is a sign of expansion and below 50 is a sign of contraction.

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Heatwave Impact

The intensive heatwave sweeping across the country led to reduced working hours, hampering production volumes and contributing to the slower pace of growth. Despite this, new business gains and strong demand continued to support factory production.

Rising Input Costs

Manufacturers faced higher input costs, with the rate of inflation picking up to its joint-highest since August 2022. This was driven by increased material and freight costs, which subsequently led to higher output charges as companies passed on the increased costs to consumers.

Production Growth

Factory production continued to expand for nearly three consecutive years, albeit at the slowest rate in three months. The growth was underpinned by robust demand and effective marketing strategies. However, production was somewhat constrained by the heatwave and rising production costs.

Export Orders

In contrast, new export orders surged at the fastest rate in over 13 years. Firms reported gains from customers across various regions, including Africa, Asia, the Americas, and Europe. This significant uptick in international sales highlights the global demand for Indian manufactured goods.

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Optimistic Outlook

Indian manufacturers exhibited the highest level of positive sentiment towards future growth in nearly nine-and-a-half years. Confidence was bolstered by ongoing advertising, innovation, and expectations of favorable economic and demand conditions.

Inflation Pressures

The quickening of input cost inflation led companies to raise their selling prices at the fastest rate in eight months. Despite the rise, the overall rate of inflation remained below its long-run average, indicating a controlled inflationary environment.


India's manufacturing sector demonstrated resilience and adaptability in May 2024, maintaining a strong growth trajectory despite external challenges. The PMI data reflects a sector that is expanding robustly, supported by strong domestic and international demand, a positive business outlook, and effective management of production and inventory levels. 

As manufacturers navigate the challenges posed by rising costs and environmental factors, their continued optimism and strategic planning position them well for sustained growth in the coming months.

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