Manufacturing Activity In India Steadied For May: S&P Global Manufacturing PMI

Manufacturing sector growth in India steadied in May, with new orders and production increasing at similar rates to those registered in April, the S&P Global Manufacturing Survey said.

According to a release, companies were able to secure new work despite lifting selling prices at the fastest rate in over eight-and-a-half years as additional cost burdens continued to be transferred to clients. "Total sales were boosted by a substantial upturn in international orders, the strongest in over 11 years. At 54.6 in May, little-changed from 54.7 in April, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index pointed to a sustained recovery across the sector. The above-50.0 reading was the eleventh in as many months and consistent with a solid improvement in operating conditions," the release stated.

Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said: "India's manufacturing sector sustained strong growth momentum in May. Thanks in part to the sharpest rise in international sales for eleven years, total new orders expanded further. In response to demand resilience, companies continued with their efforts to rebuild stocks and hired extra workers accordingly. "While firms appear to be focusing on the now, the survey's gauge of business optimism shows a sense of unease among manufacturers. The overall level of sentiment was the second-lowest seen for two years, with panellists generally expecting growth prospects to be harmed by acute price pressures. "There was little-movement in the rate of input price inflation during May, which remains historically high, but output charge inflation surged to its highest in over eight-and-a-half years as companies continued to transfer additional cost burdens to their clients."

Indian manufacturers signalled a further increase in output prices halfway through the first quarter of fiscal year 2022-23. Having accelerated to the fastest in over eight-and a-half years, the rate of inflation was marked. According to panellists, additional cost burdens were shared with clients. Input costs rose for the twenty-second successive month in May, with companies reporting higher prices for electronic components, energy, freight, foodstuff, metals and textiles.