PMI Manufacturing Soars to 58.3 in June 2024

Overview

In June 2024, the HSBC India Manufacturing Purchasing Managers’ Index™ (PMI®) bounced back strongly to 58.3 from 57.5 in May, marking a clear improvement in business conditions. This index serves as a barometer: readings above 50 indicate growth, while below 50 signal contraction. The sector showed robust growth after a brief slowdown in May.

Demand and Production

Strong Demand Boost: Manufacturers experienced increased orders, higher production levels, and active buying across the board.

Sectoral Growth: Consumer goods led the way, supported by significant expansions in intermediate and investment goods sectors.

Employment

Record Hiring Surge: Businesses responded to rising demand by hiring at the fastest rate in over 19 years, reflecting optimism and expansion plans.

Cost Challenges

Persistent Cost Pressures: Costs eased slightly from May but remained high over the past two years, driven by increases in materials like aluminium, plastic, and steel.

Price Adjustments: To manage rising costs, manufacturers raised prices at the fastest pace since May 2022.

International Trade

Export Expansion: Overseas orders grew notably, fueled by strong demand from Asia, Australia, Brazil, Canada, Europe, and the US, despite a slight slowdown compared to May.

Supply Chain and Inventory Management

Increased Purchasing: Companies continued to build up stocks to meet demand, with suppliers improving delivery times significantly.

Inventory Dynamics: While raw material stocks rose, finished goods inventories decreased as firms sold off existing supplies.

Conclusion

The June 2024 HSBC India Manufacturing PMI® paints a positive picture of the sector’s resilience and potential for growth. Despite facing cost pressures and varying levels of confidence, manufacturers remain upbeat about future prospects. Their ability to adapt to market shifts and sustain momentum underscores their crucial role in India's economic landscape