By Siddhi Nawar
The Indian manufacturing sector closed the financial year with its greatest recovery so far with a PMI of 58.1 in March 2025, its highest mark in 8 months, and a substantial rise from February’s 56.3, according to HSBC’s PMI report.
The latest data indicates a strong improvement in the manufacturing sector, surpassing its long-term average.
India’s manufacturing sector slowed down to a 14 month low of 56.3 in February, a steady decline from January’s 57.7. Despite its slowdown, rates of expansion in output and sales remained elevated overall. Favourable domestic and international demand prompted firms to increase purchasing activity and hire extra workers at above-trend rates. Meanwhile, The pace of job creation was the second-highest recorded in PMI history, following January 2025.
The rise was driven by a surge in new orders, with total sales expanding at the fastest pace since July 2024, as a result of strong demand, positive customer interest, and effective marketing, leading to increased production at the fiscal year-end.New export orders grew but at a slower three-month pace, with gains from Asia, Europe, and the Middle East. To prevent stock shortages, manufacturers boosted input purchases to a seven-month high, well above the average. Suppliers largely met demand, though lead times shortened at a slower pace.
Pre-production inventories rose sharply, reaching a five-month high, while capacity pressures remained mild. Employment grew steadily but hiring slowed due to marginally rising backlogs.
Input costs increased due to higher prices for copper, electronics, leather, LPG, and rubber, pushing inflation to a three-month high, though still below the long-term trend. However, selling prices rose at the slowest pace in a year.
Overall, strong demand, better customer relations, and pending projects supported optimism for output growth in the coming year.
Movement of Manufacturing PMI in FY25
