Companies upped the pace at which additional materials were bought, and more jobs were created

FPJ News Service mumbai

Up from 59.1 in July to 59.3 in August, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI)–a single-figure indicator of sector performance–indicated the fastest improvement in operating conditions for 17-and-a-half years, the survey compiled by S&P Global said on Monday.

“India’s manufacturing PMI hit another new high in August, driven by a rapid expansion in production. The increase of US tariff on Indian goods to 50% might have contributed to the slight easing in new export orders growth, as American buyers refrain from placing orders in the midst of tariff uncertainty. Overall orders growth, on the other hand, held up much better, suggesting that domestic orders remained robust, helping to cushion against tariff-related drag on the economy. Manufacturers’ continued optimism for future output is a positive sign,” said Pranjul Bhandari, chief India economist at HSBC.

The manufacturing growth gained further momentum in August, with ongoing improvements in demand continuing to underpin robust increases in factory orders and production. Companies upped the pace at which additional materials were bought, and more jobs were created, partly reflecting positive expectations regarding the outlook. Input stocks rose again, while finished goods inventories expanded for the first time in nine months. Meanwhile, subdued cost pressures compared with a marked upturn in selling charges, the report said.

The upward movement in the headline figure largely reflected an acceleration in growth of production volumes. The rate of expansion was the quickest in close to five years. When explaining the rise, panel members pointed to a better alignment of supply with demand.

Incoming new orders rose to broadly the same extent as in July, which was the fastest in 57 months. In addition to demand buoyancy, survey participants linked growth to advertising success.