India's Manufacturing Sector Sees Significant Growth in March, Employment Rising: HSBC
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Synopsis
The HSBC Flash India survey indicates that India's manufacturing sector saw significant growth in March, with increased sales and production driven by rising demand. Hiring also rose during this period, signaling a robust end to FY25.
Key Takeaways
- Manufacturing sector growth in March
- Increased hiring in the sector
- HSBC Composite Output Index remained strong
- New orders continued to rise
- Inflation rates below long-term averages
New Delhi, March 24 (NationPress) India's commercial activities concluded FY25 on a strong note, as the manufacturing sector experienced a significant expansion in both sales and production throughout March, fueled by increasing demand for goods. Additionally, hiring witnessed an uptick during the month, as per the HSBC Flash India survey released on Monday.
The HSBC Flash India Composite Output Index remained steady at 58.6 in March, slightly down from February's final reading of 58.8. This figure surpassed its long-term average of 54.7 and continued to signify strong growth.
The HSBC Flash India Manufacturing PMI rose from 56.3 in February to 57.6 in March, indicating a significant enhancement in operational conditions, closely aligned with the average for FY25. Three out of the five primary sub-components—output, new orders, and purchase stocks—increased since the previous month, according to the survey.
Private sector firms attributed the rise in production largely to favorable demand trends. New orders continued to grow, extending the current expansion phase to over three-and-a-half years.
Manufacturers reported a quicker increase compared to February, surpassing the growth rate seen in service providers. The latter saw the second-slowest pace of expansion since November 2023, as companies faced intensified competitive pressures.
Order volumes at Indian private sector firms remained bolstered by international sales. Although new export order growth slowed to a three-month low, it stayed above the average since the series began in September 2014. Manufacturing firms noted a quicker rise in new business from abroad compared to their service counterparts.
The volume of outstanding business across India's private sector grew in March, although the rate of accumulation eased from February and was generally mild. Increases in both manufacturing and service sectors were softer.
Nonetheless, the need to manage workloads and meet rising demand led private sector companies to recruit additional staff in March. For the first time in seven months, manufacturers reported a quicker increase in headcounts than service providers.
The overall inflation rate remained below its long-term average. Prices for Indian goods and services increased at the slowest rate since February 2022.
Business confidence remained strongly positive in March; however, intense competition was the primary concern among survey respondents in the qualitative segment of the survey. Both manufacturers and service providers expressed slightly less optimism regarding output prospects than they did in February, according to the HSBC survey.
