India's Manufacturing PMI Falls To 18-Month Low In December

India's manufacturing activity fell to an 18-month low in December as growth momentum faltered, a private survey showed. 

The HSBC India Manufacturing Purchasing Managers’ Index survey, conducted by S&P Global, fell to 54.9 in December from 56 in November. A print above 50 means expansion, while a reading below 50 indicates contraction.

There were softer, albeit sharp, increases in factory orders and output, while business confidence towards the year-ahead outlook strengthened, the survey showed.

New business gains, favourable market conditions, fairs and expositions collectively induced another sharp increase in manufacturing production during December, according to panelists. That said, the rate of expansion softened to the weakest since October 2022 even as it remained above its long-run average. Growth was reportedly curbed by fading demand for certain types of products.

Goods producers signalled a further uptick in purchasing costs at the end of the 2023 calendar year. Among the items reported to have been up in price were chemicals, paper and textiles. However, for the fourth month in a row, the rate of charge inflation surpassed that of input prices.

Employment was largely stable in December.

When assessing the year-ahead outlook for production, Indian manufacturers were at their most upbeat for three months. Anecdotal evidence highlighted advertising, better customer relations and new enquiries as the main factors boosting business confidence in December.