FX.co ★ India's Manufacturing Growth Hits 3-Month High On Strong Demand

India's manufacturing activity expanded at the fastest pace in three months amid faster rises in new orders and output, the results of the purchasing managers' survey from S&P Global showed on Monday.

The manufacturing Purchasing Managers' Index, or PMI, rose to 56.4 in March from 55.3 in February. A reading above 50 indicates expansion in the sector.

New orders grew at the sharpest pace in three months on the back of fruitful marketing efforts along with demand resilience and competitive pricing. Growth in export orders has also accelerated since February.

Similarly, output growth quickened to a three-month high, underpinned by the ongoing improvements in total sales volumes.

Demand resilience also pushed firms to increase their input inventories. Stocks of purchases rose at a sharp rate that was one of the strongest seen in over 18 years of data collection.

Consequently, manufacturers raised their purchasing activity at the fastest pace since May 2022.

On the price front, cost pressures moderated in March, while selling price inflation was broadly unchanged compared to last month.

Employment levels in the Indian manufacturing sector showed not much variation at the end of the final fiscal quarter.

Looking ahead, firms expect production to increase over the next twelve months amid hopes of improved customer relations, new product releases and advertising to support sales. Nonetheless, the overall level of positive sentiment dropped to an 8-month low due to concerns surrounding competitiveness and general inflation.