India's manufacturing sector gained much strength in June on the back of a surge in consumer demand, with soaring employment growth at its highest in 19 years. This is according to the final HSBC's India Manufacturing Purchasing Manager Index by S&P Global released today. On the other hand, the manufacturing PMI rose by 0.8 percentage points compared to the previous month to reach 58.3 during June, according to Maitreyi Das, HSBC's global economist. This growth was supported by increased new orders and quantities produced in all sectors, including consumer goods, intermediate goods, and investment goods.
The consumer goods sector performed very strongly to take the sector into position. Adding to all the good news in this report was the good export growth, with surveyed firms reporting considerable growth in new export orders coming from key economies such as Asia, Australia, Brazil, Canada, Europe, and the US.
Higher input costs persisted above their long-term average, but strong demand sustained earlier gains and allowed manufacturers to pass these on to consumers, thereby improving profit margins. Noting the resilience of demand supporting these margin improvements, Maitreyi Das commented, "Higher input costs persisted above their long-term average, but sustained strong demand enabled manufacturers to pass these on to consumers, thereby improving profit margins".".
Ahead, Commerce and Industry Minister Piyush Goyal estimated that goods and services exports of India would increase by 3 per cent to over USD 800 billion in the fiscal year 2024-25. Only recently, the Reserve Bank of India scaled up its growth estimate to 7.2 per cent from the previously estimated 7 per cent as optimism brews over prospects of the Indian economy with strong manufacturing and export performance.
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