India’s Manufacturing Sector Sees Robust Growth in January as Exports Surge: Report
Click to start listening
Synopsis
India's manufacturing industry showed remarkable growth in January, driven by a significant rise in export orders and global restocking activities, according to the latest HSBC flash PMI report.
Key Takeaways
- Manufacturing growth strengthened in January.
- New export orders surged, outpacing domestic orders.
- Input prices for manufacturers hit a ten-month low.
- Inflation expected to decrease to 4.2 percent.
- Anticipated monetary policy easing with rate cuts.
New Delhi, Jan 24 (NationPress) India's manufacturing sector has experienced significant growth in January this year, driven by a notable increase in new export orders and an anticipated surge in global restocking activities, as highlighted in the HSBC flash PMI report released on Friday.
The analysis, which encompasses 100 activity indicators, indicates that the growth trajectory has strengthened in the quarter ending December, with 65 percent of the indicators showing positive growth in the December quarter, up from 55 percent in the previous quarter.
Nevertheless, the services PMI for January showed a slight decline compared to last month, as per the statement.
“The disparity between manufacturing and services may be influenced by tariff apprehensions. We observe that new export orders have surged for manufacturers, outpacing the growth in domestic orders and service orders. This trend is likely due to accelerated restocking globally, ahead of potential new tariffs. Consequently, manufacturing output has responded to these orders by rapidly increasing production,” the report elaborates.
Cost pressure trends have also shown divergence. While input prices for manufacturers have decreased to a ten-month low, service providers have faced rising prices—the fastest increase since August 2023. As a result, service providers have raised their prices, but their profit margins have continued to shrink because the price hikes have not matched the increasing costs. Conversely, manufacturers have seen an improvement in their profit margins, according to the report.
The report also indicates that inflation is trending downward, with expectations of a further decrease to 4.2 percent in January, which may facilitate an easing of monetary policy. HSBC anticipates two rate cuts of 25 basis points each in February and April, reducing the repo rate to 6 percent.
The flash PMI serves as a preliminary indicator for the final Manufacturing, Services, and Composite PMI data for the current month, typically released about a week prior to the final PMI indices. The flash PMI is generally based on approximately 80 percent-90 percent of total PMI survey responses received each month, all of which contribute to the final release.
