NEW DELHI: India’s manufacturing sector showcased continued resilience in December 2024, with employment rising for the tenth consecutive month and reaching its fastest pace of job creation in four months, according to HSBC India Manufacturing Purchasing Managers’ Index (PMI).
Approximately 10 per cent of companies expanded their workforce, reflecting sustained optimism in the sector. At the same time, post-production inventories saw their sharpest decline in seven months, driven by strong sales volumes that significantly depleted stock levels. India’s manufacturing sector ended 2024 on a softer note as the PMI for December fell to 56.4, marking the lowest reading of the year.
According to HSBC data, the figure, down slightly from November’s 56.5 and below the ‘flash’ estimate of 57.4, still signalled robust growth as it remained above the long-term average of 54.1. However, the data highlighted signs of moderation in key areas, including production, new orders, and inventories.
Ines Lam, Economist, HSBC, said, “India’s manufacturing activity ended a strong 2024 with a soft note amidst more signs of a slowing trend, albeit moderate, in the industrial sector. The rate of expansion in new orders was the slowest in the year, suggesting weaker growth in future production.”
Lam added, “That said, there was some uplift in the growth of new export orders, which rose at the fastest pace since July. The rise in input prices eased slightly, wrapping up the year when Indian manufacturers felt the strain of sharp cost pressures.”
Factory output and new orders expanded at slower rates, reflecting increased competition and price pressures. While growth remained substantial, December marked the joint-slowest pace of expansion for 2024.
Despite this, firms noted that advertising and positive client sentiment continued to support sales. Export orders provided a silver lining, as growth in international demand rose at the fastest pace since July, offsetting weaker domestic order expansion.
Input cost pressures eased in December, with inflation moderating to a level described as mild by historical standards. However, selling prices increased sharply as firms leveraged resilient demand to pass on higher costs. This pricing power, supported by favourable market conditions, ensured margins were maintained even amid rising container, material, and labour expenses. (ANI)