Manufacturing activity hits 16-year high in March as new orders surge

Mumbai: Financial year 2024 has ended on an encouraging note in the manufacturing sector. The purchasing managers' index (PMI) of the manufacturing sector reached a 16-year high of 59.10 at the end of March. As a result of the increase in new orders, companies had to increase the number of employees as production operations increased.

HSBC India Manufacturing PMI was at a 16-year high of 59.10 in March, up from 56.90 in February. This is the highest number since 2008. An index above 50 is called expansion of that area.

The PMI has been above 50 for the 33rd consecutive month in March. According to the survey report prepared by HSBC, the growth in output has been witnessed due to rising demand in the consumption, intermediate and investment goods sectors.

New order volume was also the highest since October 2020. In anticipation of an increase in sales and since this is the last month of the financial year 2023-24, companies have also planned to build stocks.

As far as procurement of raw materials is concerned, procurement of capital goods was higher. However, inflation concerns persisted among companies participating in the survey.

Spending pressure remained at the highest level in five months. Companies paid more for cotton, iron, machinery equipment, plastics and steel.

Due to increase in production after strong orders, companies were also forced to increase recruitment. The cost of raw materials increased due to strong demand. Employee recruitment has been the best since September 2023.