January 2, 2025
New Delhi, India
PMI Data
India’s manufacturing sector ended 2024 on a softer note as growth slowed to its weakest pace in a year, according to the HSBC India Manufacturing Purchasing Managers’ Index (PMI) compiled by S&P Global.
- PMI Reading:
- December 2024: 56.4, down from 56.5 in November.
- Marked the lowest level since December 2023 but stayed above the 50-mark, indicating expansion.
Key Highlights
- Orders and Production:
- New orders and production grew at their slowest rate in 2024.
- Export orders surged, growing at the fastest pace in five months, supported by stronger demand from Asia, Australia, Europe, and the Americas.
- Employment:
- Manufacturing firms continued hiring, marking the fastest jobs growth since August 2024.
- Pricing and Costs:
- Input price inflation eased, leading firms to pass on cost savings to clients.
- Competitive and inflationary pressures curbed business sentiment.
Sector Outlook
Economists noted a moderate slowing trend despite robust overall growth.
- Expert Commentary:
- “India’s manufacturing activity ended a strong 2024 with a soft note amidst more signs of a slowing trend in the industrial sector,” said Ines Lam, Economist at HSBC.
- Optimism about future growth remains but is tempered by inflation and competitive concerns.
- Expansion Drivers:
- Increased advertising, investments, and expectations of favourable demand were cited as positive factors for 2025.
Global and Domestic Dynamics
The manufacturing sector, which contributes about 20% to India’s GDP, has shown sustained resilience, maintaining expansion for three-and-a-half years. However, December’s performance signals challenges ahead.
With competitive pricing strategies and firm international demand, the sector is poised to navigate inflationary pressures and competition while sustaining moderate growth in the coming year.
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