What Does India’s Manufacturing PMI of 57.6 in May Indicate?
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Synopsis
India's manufacturing sector is thriving, with the HSBC India Manufacturing PMI hitting 57.6 in May. Despite a slight dip from April, the index signifies robust growth. Discover how rising demand, strategic marketing, and record job creation are shaping the future of this vital sector. Join us in exploring the implications of this positive trend for India's economy.
Key Takeaways
- PMI of 57.6 indicates strong growth in manufacturing.
- Job creation reached an all-time high.
- Input costs are rising but are being managed effectively.
- Manufacturers are optimistic about future growth.
- Domestic and international demand are driving expansion.
New Delhi, June 2 (NationPress) The manufacturing landscape in India showcased a remarkable performance in May, as the HSBC India Manufacturing Purchasing Managers’ Index (PMI) recorded an impressive score of 57.6, according to a report released on Monday.
Although this figure is slightly below April’s 58.2, it comfortably exceeds the neutral threshold of 50, indicating consistent growth within the sector, as per data compiled by S&P Global.
“The PMI reading for May indicates another month of strong expansion in the manufacturing domain,” stated Pranjul Bhandari, Chief India Economist at HSBC.
“The rise in employment growth to an all-time high is a significant positive development. While input cost inflation is on the rise, manufacturers appear to be managing profit margins effectively by increasing output prices,” she noted.
This growth trend is driven by robust domestic and international demand, along with successful marketing strategies that have propelled export orders to their highest levels in three years.
Firms across India reported heightened interest from major markets in Asia, Europe, West Asia, and the United States.
Additionally, manufacturing companies ramped up hiring in May, achieving record job creation since the inception of the PMI survey.
Importantly, businesses are prioritizing the strengthening of their permanent workforce, facilitating smoother operations and improved workload management.
This robust job growth is a boon for India's youthful labor force and signifies ongoing investment in the industry’s future.
Input costs experienced a moderate increase, driven by commodities such as aluminium, cement, iron, leather, rubber, and sand, as well as freight and labor costs.
In response to these rising costs, manufacturers raised selling prices significantly to sustain healthy margins, as indicated by the report.
Despite these adjustments, business confidence remains elevated. Manufacturers express optimism for the coming year, highlighting effective marketing, increased customer inquiries, and a supportive domestic market as pivotal factors for future growth.
To support this positive momentum, India’s overall industrial production recorded a growth of 2.7 percent in April 2025, based on official data from the Ministry of Statistics released last month.
The manufacturing sector itself grew by 3.4 percent during the month, with 16 out of 23 industry groups reporting positive output, according to data released on May 28.
Point of View
It's clear that the findings from the HSBC India Manufacturing PMI report highlight a significant moment for India's economy. The sustained growth in manufacturing not only reflects the sector's resilience but also indicates broader economic health. The reported job creation is particularly crucial for our young workforce. Therefore, it is imperative that we continue to support and invest in this promising sector.
NationPress
09/06/2025
Frequently Asked Questions
What is the significance of the PMI index?
The PMI index is a key indicator of the economic health of the manufacturing sector. A reading above 50 indicates expansion, while below 50 signals contraction.
How does the PMI affect employment?
A higher PMI often correlates with increased hiring as companies respond to growing demand. In May, India saw record job creation due to the positive PMI.
What factors contribute to PMI fluctuations?
PMI fluctuations can be influenced by various factors including domestic and international demand, input costs, and market conditions.
Why is the manufacturing sector important for India?
The manufacturing sector is crucial for India's economic growth as it drives job creation, boosts exports, and contributes significantly to GDP.
What challenges does the manufacturing sector face?
Challenges include rising input costs, global supply chain disruptions, and competition from other economies.
