India’s manufacturing activity slowed in December to its weakest pace in 12 months, according to a private survey released on Thursday. The HSBC Purchasing Managers’ Index (PMI), compiled by S&P Global, dipped slightly to 56.4 in December from 56.5 in November, remaining well above the 50-point threshold that separates growth from contraction.
Despite the December slowdown, the average PMI for 2024 rose to 57.5, higher than the 56.8 average recorded in 2023, signaling stronger annual performance. “India’s manufacturing activity ended a robust 2024 on a softer note, with signs of a moderate slowdown in the industrial sector,” said Ines Lam, economist at HSBC.
New orders expanded at their slowest rate of the year, raising concerns about future production growth. However, export sales showed resilience, growing at a slightly stronger pace as firms secured international orders. The survey noted that demand remained a key driver of production growth, supported by advertising and positive client appetite.
Manufacturers faced rising costs in December, with increases in container, material, and labor expenses. Selling prices rose significantly, with the pace among the highest seen in around two decades. “Input price pressures eased slightly, but 2024 remained a challenging year for Indian manufacturers due to sharp cost increases,” Lam noted.
On a positive note, manufacturing employment rose for the tenth consecutive month, with hiring activity reaching a four-month high. Approximately 10% of firms added staff, while fewer than 2% reported job cuts.
The outlook for 2025 remains optimistic, with manufacturers anticipating a rise in output. However, concerns over inflation and increasing competition persist, potentially influencing future growth.
The PMI data suggests that while India’s manufacturing sector maintained robust growth throughout 2024, the year closed with a modest deceleration, highlighting both the sector’s resilience and the challenges it continues to face.
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