Manufacturing PMI rises to 54.7 in April, cost pressure hits 44-month high

NEW DELHI : India’s private sector manufacturing activity growth recovered in April on the back of a sharper export rise, after plummeting to a four-year low in March due to the West Asia situation, data compiled by S&P Global on Monday showed.

HSBC’s India Manufacturing Purchasing Managers’ Index (PMI), which measures monthly change in manufacturing output, rose to 54.7 in April from 53.9 in March.

However, the latest figure — a weighted average of new orders, output, employment, suppliers’ delivery times and stocks of purchases indices — was lower than the Flash India Manufacturing PMI of 55.9, released last month.

The reading remained above 50, which denotes expansion in activity, while below that signifies contraction. The headline figure has been in the expansion zone for the 54th month running.

“India’s manufacturing PMI rose to 54.7 in April from 53.9 in March, but still marking the second slowest improvement in operating conditions in nearly four years. Spillovers from the West Asia conflict are becoming more evident, particularly through inflation — input costs increased at the fastest pace since August 2022, and output prices rose at the quickest rate in six months,” Pranjul Bhandari, chief India economist at HSBC, said.

There were mild recoveries in growth of new business intakes and production among Indian manufacturers, but rates of increase were still the second-weakest since 2022, said the survey.

While new orders and output grew, they still trailed readings seen in at least three-and-a-half years. Growth was hampered by competitive conditions, the West Asia war and a reluctance among clients to approve pending quotes, the survey added.

Meanwhile, new export orders expanded sharply at the start of the first quarter of FY26, with the pace of growth at a seven-month high.

Despite only a marginal increase in outstanding business volumes, manufacturers recruited additional workers at the start of Q1.

Moreover, the rate of job creation was the strongest in 10 months. Hiring growth reflected expansion plans, according to anecdotal evidence.

Average cost burdens rose further in April due to higher prices of aluminium, chemicals, electrical components, fuel, leather, petroleum products and rubber, with respondents attributing the hikes to the West Asia war.

“The overall rate of inflation climbed to its highest since August 2022. Subsequently, goods producers lifted their fees to the greatest extent in six months,” the survey noted.

Consumer goods was the only category to see a slowdown in cost inflation. But the rate of increase (overall trend) still surpassed those seen elsewhere, the survey showed.

This sub-sector topped the rankings for output charge inflation.

Although manufacturers in India purchased additional raw materials and semi-finished items in April, the rate of expansion retreated to among the weakest in close to two-and-a-half years.

“Output, new orders (including exports) and employment grew moderately, pointing to continued resilience in India’s manufacturing sector,” Bhandari added.

The rate of job creation rose to the highest in 10 months, with hiring growth reflecting expansion plans, according to the survey respondents.

Source : BS