New Delhi [India], September 1 : India's manufacturing sector gained further momentum in August, with the country's Manufacturing Purchasing Managers' Index (PMI) climbing to 59.3 from 59.1 in July, according to the HSBC India Manufacturing PMI data released on Monday.
The reading highlighted the fastest improvement in operating conditions in 17-and-a-half years, underscoring the strength of the country's factory activity.
HSBC report stated "Up from 59.1 in July to 59.3 in August, the seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index™ (PMI®) - a single-figure indicator of sector performance - indicated the fastest improvement in operating conditions for 17-and-a-half years".
The rise in the headline figure was largely driven by an acceleration in production volumes. The rate of expansion in output was the quickest in nearly five years. Panel members surveyed for the report attributed the growth to a better alignment of supply with demand.
The report mentioned that the strong domestic demand continued to underpin robust increases in factory orders and production during the month. New orders rose at a pace similar to July, which had marked the fastest expansion in 57 months.
In addition to buoyant demand, participants also pointed to successful advertising campaigns as contributing to higher sales. The strongest sales and output growth was seen in the intermediate goods category, followed by capital goods and then consumer goods.
On the external front, HSBC noted that international orders placed with Indian manufacturers grew at a softer pace compared to previous months. The rise in foreign demand was the weakest in five months, though it still remained sharp by historical standards.
Firms reported securing new work from clients across Asia, Europe, the Middle East and the US.
The report also highlighted trends in inventories and pricing. Input stocks rose once again, while finished goods inventories expanded for the first time in nine months, ending a prolonged period of depletion.
Cost pressures persisted in August, with increases reported for items such as bearings, leather, minerals, steel and small electronic parts. However, the overall rate of input cost inflation was moderate and below its long-run average. In contrast, selling charges rose at a sharper pace, reportedly due to strong demand conditions.
Overall, the HSBC report noted that India's manufacturing sector continued its growth streak in August, with demand strength, advertising success, and supply-demand alignment driving output to its strongest expansion in nearly five years.
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