According to statistics made public by S&P Global Market Intelligence on Monday, manufacturing activity in India, as assessed by the Purchasing Managers’ Index (PMI), reached a 13-month high in December. This suggests that 2022 finished well for Indian manufacturers.
From 55.7 in November to 57.8 in December, the manufacturing PMI increased. The third quarter PMI average reached its highest mark (56.3) since December 2021 thanks to the most recent December number. An increase in manufacturing activity is indicated by a PMI value above 50. Since October 2022, the PMI manufacturing has increased each month.
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According to Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, “manufacturers were strongly confident in their ability to lift production from present levels. However, some may question the resilience of the Indian manufacturing industry in 2023 amid a deteriorating outlook for the global economy.”
Undoubtedly, the PMI is thought to better reflect economic activity in the formal sector than the unofficial sector. According to the majority of institutional and private estimates, including the Reserve Bank of India’s (RBI), the Indian economy will have slower growth than in the first half of the fiscal year (October 2022–March 2023) in the second half of the fiscal year.
Headline GDP growth is anticipated to be 4.4% and 4.2% in the quarters ending December 2022 and March 2023, respectively, down from 13.5% and 6.3% in the quarters ending June and September 2022, respectively.
Due to persistent demand conditions that fueled an increase in manufacturing sales, the PMI value increased in December. According to several observers, the sales gain in December was supported by strong advertising, product variety, and favorable economic conditions.
“Less difficult supply chain conditions also helped the recovery. Delivery timings were generally consistent, allowing businesses to increase their input supplies and secure essential raw materials, De Lima stated.
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The faltering global economy is having a negative impact on Indian manufacturing. As numerous companies apparently failed to acquire new business from important export markets, new orders from abroad increased at the slowest rate since August 2022, the memo stated.
