India’s manufacturing PMI soars to 31-month high

India’s factory output in May witnessed the most rapid expansion in the past 31 months, driven by strong demand and increased production. It is the highest employment rate in six months.

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India’s factory production in May experienced its fastest growth in the past 31 months due to robust demand and increased output. Enhanced confidence among businesses resulted in the highest rate of employment in six months, according to a recent private survey.

In May, the Manufacturing Purchasing Managers’ Index (PMI), which is compiled by S&P Global, experienced a significant increase, reaching its highest level in over two and a half years at 58.7. This figure surpassed expectations, as Reuters had predicted a decline to 56.5. Importantly, the PMI remained above the 50-mark for the 23rd consecutive month, indicating sustained growth and differentiation from contraction in the manufacturing sector.

“While the upturn in domestic orders strengthens the foundations of the economy, rising external business foster international partnerships and boost India’s position in the global market,” said Pollyanna De Lima, economics associate director at S&P Global in a press release.

New orders in the manufacturing sector expanded at the most rapid rate since January 2021. Additionally, foreign demand experienced its fastest growth in six months. This surge in orders led to a notable acceleration in the number of purchases, reaching the highest pace in over 12 years.

Furthermore, due to robust demand, companies were able to increase their hiring at the strongest rate since November 2022. Moreover, optimism regarding future business activity reached its highest level in five months.