India's manufacturing sector growth rises in June; hiring
Writer Admin
NEW DELHI: India's manufacturing sector rose significantly
during June, primarily driven by a steady inflow of new business amidst favorable demand conditions, as per an HSBC India report
released on Monday. HSBC India Manufacturing Purchasing Managers' Index (PMI) increased from 57.5 in May to 58.3 in June. In PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
The June data revealed that the robust expansion in sales among Indian manufacturers was primarily attributed to strong
underlying demand, increased export volumes, and effective advertising campaigns, which eventually led to a record-breaking
surge in employment, as per the report.
"Firms increased their hiring at the fastest pace in over 19 years. Input buying activity also rose during the month,"
said Maitreyi Das, global economist at HSBC, noted that
Meanwhile, the report also highlighted that staff expenses increased in June, which, along with rising material
and transportation costs, led to an overall increase in operating expenses.
However, manufacturers passed the additional cost burdens to their clients, thanks to the favorable demand
conditions. Selling prices were increased to the highest extent in over two years.
"On the price front, input costs moderated slightly in June, but remained at elevated levels. Manufacturers were
able to pass on higher costs to customers, as demand remained robust, resulting in improved margin," said Das.
Furthermore, new export orders saw a substantial increase in June, with companies crediting the higher inflows
of new work from overseas to improved demand from Asia, Australia, Brazil, Canada, Europe, and the United
States.
The survey indicated that the outlook for the manufacturing sector remained optimistic, with nearly 29 percent
of panelists anticipating output growth in the coming year. Firms predicted further improvements in demand
and order book volumes, with advertising and increased client inquiries also contributing to the positive
sentiment.
The HSBC India Manufacturing PMI® is compiled by S&P Global based on responses to questionnaires sent to
purchasing managers in a panel of approximately 400 manufacturers