Manufacturing PMI Eases In April, But Still Indicates Strong Expansion

New export orders increased markedly in April, albeit at a softer rate than that seen for total sales, suggesting that the domestic market remained the main driver of growth. Sustained improvements in demand, favourable economic conditions and greater sales volumes continued to underpin output growth.

Indian goods producers forecast higher output in the year ahead, relative to present levels. Business confidence strengthened in April on the back of expectations that demand will remain buoyant. Advertising and brand recognition were also reported as opportunities to the outlook.

To fulfil current and expected improvements in demand, manufacturers hired additional staff at the start of the first fiscal quarter. The pace of job creation was moderate, but nevertheless the quickest since September 2023.

Pressure on operating capacities remained mild as evidenced by a slight uptick in outstanding business volumes. Although the latest results showed an intensification of cost pressures during April, the rate of inflation remained below its long-run average. Among the items mentioned as up in price were aluminium, paper, plastics and steel. Amid reports of higher material and labour costs, Indian manufacturers increased their selling prices in April. The rate of charge inflation quickened to a three-month high, converging to its long-run average.