India's factory growth continued its robust trend in May, as seen in the most recent HSBC India Manufacturing Purchasing Managers' Index (PMI), which came in at 57.6, based on figures released Monday.
While down slightly from April's 58.2 reading, the index was well above the 50-point mark, signaling consistent growth in plant activity, according to numbers tallied by S&P Global.
India's May PMI for manufacturing indicated another month of strong sector growth," said HSBC's Chief India Economist, Pranjul Bhandari.
She continued, "The rate of increase in jobs to a fresh high is definitely a welcome sign. Input cost inflation is building up, but producers appear to be finding ways to reduce the squeeze on profit margins by increasing prices for their output.
This momentum was sustained significantly by high domestic and overseas demand, complemented by effective marketing efforts which helped push export orders to their highest level in almost three years.
Indian manufacturers registered heightened interest from major markets such as Asia, Europe, West Asia, and the United States.
The industry also saw a significant increase in May hiring, with jobs growth reaching its strongest level since the launch of the PMI survey. Companies were said to focus on expanding their permanent staff, helping to streamline functions and better control workloads.
Such employment growth is especially welcome for India's youth labour market and is indicative of wider investments in the nation's manufacturing base.
On the pricing side, input prices experienced a modest increase. This was due to increased prices for items like aluminium, cement, iron, rubber, leather, and sand, as well as freight and labour charges.
To counterbalance these cost factors, companies increased their selling prices at a vigorous rate, which helped to protect profit margins, the report underscored.
Even after inflationary trends, sentiment in the manufacturing sector is upbeat. Firms mentioned effective advertising campaigns, increased customer inquiries, and firm domestic demand as factors behind their positive expectations for the coming months.
Adding to this robust sectoral performance, India's industrial production as a whole saw a 2.7% growth in April 2025, as per the latest figures released by the Ministry of Statistics on May 28.
The manufacturing sector itself increased by 3.4% in the month, with 16 out of 23 industry categories recording an increase in production, highlighting widespread improvement across the sector.
Read also| India's Foodgrain Output Surges 6.6% to Record 354 Million Tonnes in 2024–25
Read also| India's FDI Inflows Surge 14% to Exceed $81 Billion in FY 2024–25
