New Delhi, April 2: According to HSBC’s flash India PMI data, ongoing disruptions due to conflicts in West Asia are significantly affecting the global economy, with noticeable impacts on Indian industries. As a result, India’s Manufacturing PMI fell to 53.9 in March.
Companies are experiencing increased cost pressures, reaching their highest levels since August 2022. However, S&P Global, which compiles the PMI data, noted that firms have absorbed a significant portion of these rising costs, as the increase in selling prices has been the lowest in two years.
The report also revealed that companies have stockpiled additional inventory to mitigate potential risks, leading to an increase in job creation and raw material procurement.
Pranjul Bhandari, Chief Economist at HSBC, stated, “There has been a decline in production and new orders, indicating softer demand and rising uncertainty. Meanwhile, costs for aluminum, chemicals, and fuel have surged. Currently, companies are bearing the brunt of these increases, resulting in minimal price hikes.”
March data indicated the fastest rise in input costs in over three and a half years. The report highlighted price increases for aluminum, chemicals, fuel, jute, leather, textiles, oil, rubber, and steel.
Additionally, Indian companies continued to purchase extra raw materials for production and increased their inventory levels.
While the overall growth rate has dipped to a three-month low, it remains historically robust. Companies attributed this improvement to increased sales and efforts to maintain supply chains.
Notably, suppliers have been able to deliver raw materials on time, leading to improved vendor performance.
A positive sign is that export orders for Indian companies saw the fastest growth since September of last year, with rising demand from countries like Australia, Brazil, Canada, China, Europe, Japan, the Middle East, Turkey, and Vietnam.
The report indicates that companies have increased employment at the highest rate in the past seven months and are more optimistic about production for the coming year.
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