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Informist, Monday, Jun. 2, 2025

 

--India May manufacturing PMI 57.6 vs 58.2 in April

 

MUMBAI - India's manufacturing sector activity expanded at the slowest pace in three months in May, with the HSBC India Manufacturing Purchasing Managers' Index falling to 57.6 last month from 58.2 in April, S&P Global said on Monday. Activity moderated last month as competition, inflation and the India-Pakistan conflict weighed on demand, S&P Global said.

 

The final manufacturing PMI print for May is a lower than the flash figure of 58.3, data for which was released on May 22. A PMI reading of more than 50 denotes expansion in activity, while a print below it shows contraction.

 

"India's May manufacturing PMI signalled another month of robust growth in the sector, although the rate of expansion in output and new orders eased from the previous month," Pranjul Bhandari, chief India economist at HSBC, was quoted as saying in the release. "The acceleration in employment growth to a new peak is certainly a positive development."

 

Companies increased input buying of products used in manufacturing on the back of a rise in sales. The pace of expansion in input buying was sharp but marginally lower compared to April. Firms hired additional staff in May, with the rate of job creation rising to a new series record, S&P Global said.

 

Cost inflation climbed to a six-month high and selling prices increased at one of quickest rates in over 11 years. Manufacturing companies increased purchasing prices due to higher prices of aluminium, cement, iron, leather, rubber, and sand. Firms also reported increased cost of freight and labour, which led to higher selling prices in May, S&P Global said.

 

The latest PMI data showing slower activity pace and higher inflation comes days ahead of the meeting of the Reserve Bank of India's Monetary Policy Committee, which will announce its interest rate decision on Friday. The MPC is widely expected to lower the repo rate by 25 basis points this week, taking the cumulative interest rate easing to 75 bps since February.

 

Government data released Friday showed India's GDP growth rose higher than expected in Jan-Mar to a four-quarter high of 7.4%. The manufacturing sector, as per government data, expanded 4.8% on year in Jan-Mar, the quickest in three quarters.  End

 

Reported by Shubham Rana

Edited by Vandana Hingorani

 

 

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