Manufacturing PMI in March rises to a 16-year high, and employment improves.

India's manufacturing sector concluded the 2023-24 fiscal year on a remarkable note, as indicated by a survey released by HSBC, revealing a headline Purchasing Managers Index (PMI) soaring to a 16-year high of 59.1 in March, up from 56.9 in February. A PMI exceeding 50 signifies expansion, with the sector witnessing robust growth, particularly in output and new orders, the strongest since October 2020. Additionally, employment levels showed improvement, with firms scaling up purchasing activity. Despite a mild uptick in cost pressures, manufacturers prioritized customer retention, increasing the lowest charge over a year.

The March manufacturing PMI, slightly below the preliminary estimate of 59.2, reflects sustained growth in output for 33 consecutive months, marking the sharpest uptick since October 2020. New orders surged, with the fastest acceleration in nearly three-and-a-half years, driven by buoyant domestic and export demand, notably from Africa, Asia, Europe, and the US. In response to heightened production and orders, manufacturers expanded their workforce, with the pace of job creation marking the strongest performance since September 2023, particularly notable in the recruitment of mid-level and full-time employees. The survey underscores accelerated growth across consumer, intermediate, and investment goods sectors, with investment goods makers experiencing the steepest expansion in production.

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