Priyanka Tiwari
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Suspense crime, Digital Desk : India's manufacturing sector experienced a slight moderation in growth during May 2024, though it continued its robust expansionary trend. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, registered at 57.5 in May. This marks a dip from April's stronger figure of 58.8 and is a three-month low, yet it comfortably remains above the crucial 50-point mark that separates growth from contraction. This signifies the 19th consecutive month of expansion for the sector.
The slight slowdown in the headline figure was partly attributed to intense heatwaves across several parts of the country and some election-related disruptions, which reportedly impacted production volumes to some extent. Despite these challenges, new orders continued to pour in at a significant, albeit slightly slower, pace than the record levels seen in April, indicating sustained strong domestic demand.
A particularly bright spot was the performance of new export orders, which surged at the fastest pace since April 2011. This highlights a robust international appetite for Indian manufactured goods, providing a significant boost to the sector.
While the pace of production growth softened slightly, it remained substantial. In response to sustained demand and production needs, companies increased their staffing levels modestly, marking the first rise in employment in three months.
On the inflation front, there was some easing. Input cost pressures softened, with the rate of increase in raw material prices slowing down. Consequently, manufacturers raised their selling prices at a more moderate pace compared to the previous month.
Looking ahead, business confidence remains high. Companies are optimistic about production volumes over the coming year, buoyed by expectations of continued strong demand both domestically and internationally. Maitreyi Das, India Economist at HSBC, noted that despite the slight moderation, "the manufacturing sector remained in expansionary territory, with an optimistic outlook for future business. New export orders were a bright spot, surging at the fastest pace since April 2011."
Overall, while May saw a slight cooling in the growth momentum, the underlying strength of demand, record export performance, and positive business sentiment suggest India's manufacturing sector remains on a solid growth trajectory.
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