The country's industrial activity decreased since March, April's manufacturing PMI stood at 58.8

Manufacturing PMI in April: The country's manufacturing activity declined on a monthly basis in April. The manufacturing PMI fell marginally to 58.8 in April from a 16-year high of 59.1 in March.

According to HSBC Purchasing Managers' Index (PMI) data, the manufacturing PMI stood at 58.8 in April. There has been a decline on a monthly basis but manufacturing activities in more than 50 reporting countries are running at full strength. Specifically, a PMI above 50 reflects expansion in industrial activity and a PMI below 50 reflects contraction.

Fastest growth in last three and a half years

After a slight slowdown in the Indian manufacturing sector in April, the sector continued strong growth in the first quarter, according to HSBC PMI data. It is seeing the fastest growth in three and a half years due to strong demand, growth in new business and expansion in production.

HSBC chief India economist Pranjal Bhandari said April's manufacturing PMI showed the second-fastest improvement in three and a half years. Strong demand, increased production and a modest decline after March's record high indicate a positive outlook for the future. As a result, recruitment is likely to increase.

Rising production costs may pose a challenge

Amidst signs of growth in manufacturing activities, cost pressures, i.e. rising production costs, are posing a major challenge. The prices of raw materials including aluminium, paper, plastic and steel have been increasing since January. Due to which production cost and labor cost have increased. As a result, Indian manufacturers raised selling prices in April. However, the PMI turned positive due to increase in new orders.