India’s manufacturing PMI rises to 55 in May over strong output growth, new orders

NEW DELHI: India’s manufacturing PMI rose to 55.0 in May, above the readings of 54.7 in April and the flash figure of 54.3 due to quicker increases in buying levels, new orders and output compared to April, with stockpiling gaining strength as a result, the HSBC Flash India PMI data showed on Monday.

May data showed that growth across India's manufacturing industry came in stronger than the 'flash' estimates released around 10 days ago.

Meanwhile, purchasing prices rose at the second-fastest pace since April 2022 (behind April), while the rate of output charge inflation was below the average seen over the past year, according to the data.

The final PMI print pointed to the best improvement in the health of the sector for three months.

“India’s final manufacturing PMI points to another month of possible precautionary stockpiling as the Middle East conflict remains unresolved. Output growth accelerated, while purchasing activity and stocks of finished goods rose at a faster pace,” said Pranjul Bhandari, Chief India Economist at HSBC.

New order growth was driven by domestic demand, as export order growth moderated. Input cost inflation eased slightly on the month, and output price inflation slowed more sharply, suggesting a potential squeeze on manufacturers’ margins, she mentioned.

The PMI data further showed that goods producers reported the fastest expansions in new orders and output since February.