Manufacturing PMI rises to 6-month high in Jan on exports and new orders

Indian goods producers kicked off 2025 on a robust note as Purchasing Managers’ Index (PMI) rose to 57.7 in January, recovering sharply from 12-month low of 56.4 in the previous month.

 

This rise was fuelled by the steepest upturn in exports in nearly 14 years and by new orders which rose at the quickest pace since last July.

 

The PMI figure was released by HSBC and compiled by S&P Global. A figure above 50 in the index denotes expansion in activity and below it signifies contraction.

 

“Cost pressures retreated to their weakest in 11 months, but selling prices rose solidly amid buoyant demand. Meanwhile, business confidence strengthened. January data also showed a pick-up in growth of buying levels and record job creation,” the survey said.

 

The survey attributed the increase in new orders to better domestic demand and a pick-up in international sales. International demand for Indian goods strengthened in January, with panellists noting gains from across the globe. Notably, the rate of expansion in new export orders was the best seen in just under 14 years.

 

Pranjul Bhandari, chief India economist at HSBC, said that domestic and export demand were both strong, supporting new orders growth.

 

“The employment PMI suggested robust job creation in the manufacturing industry, as the index increased to its highest level since the series was created. Input cost inflation eased for a second month, relieving pressure on manufacturers to raise final output prices,” she added. 

 

The survey also noted that companies turned more optimistic about output prospects, with nearly 32 per cent of firms forecasting growth and just 1 per cent expecting a reduction.

 

“According to panel members, buoyant underlying demand, better customer relations, favourable economic conditions and marketing efforts all bode well for growth prospects,” the survey noted.

 

On the employment front, the survey noted that robust sales gains and upbeat forecasts prompted companies to recruit additional workers at the start of the fourth fiscal quarter. The extent to which employment expanded was the greatest seen in nearly 20 years of data collection.

 

“Indian manufacturers also accelerated the rate at which inputs were purchased. January's upturn was the strongest in three months and sharp by historical standards. Firms were successful in their efforts to lift inventories as suppliers were able to deliver materials in a timely manner. Vendor performance improved to the greatest extent in eight months, while the accumulation in input stocks was the fastest since October 2024,” the survey noted.