India’s Manufacturing Sector Hits 12-Month Low in December

ENA Sectors 2025-01-02 16:32:00 New Delhi, Jan 2 (KNN) Indias manufacturing sector stumbled to a 12-month low in December, dashing hopes of a recovery as factory activity levels dropped further from Novembers weak performance. The HSBC India Manufacturing Purchasing Managers Index (PMI), a key gauge of sectoral activity, slipped from 56.5 in November to 56.4 in December. While still above the 50-mark that indicates growth, the latest reading underscores a continued slowdown. New orders and output levels hit their lowest for 2024, reflecting subdued demand both domestically and internationally. Export orders rose at the fastest pace since July, but this was insufficient to offset the broader decline. The slowdown dampens prospects of a rebound in the October-December quarter, following tepid growth of just 2.2 per cent in the July-September quarter. Input costs remained a concern, with firms facing higher container, material, and labor costs. Although the rate of input price inflation eased slightly from November, producers continued to raise selling prices, building on Novembers record pace of price hikes over the last 11 years. Inventory trends revealed mixed signals. Firms reduced post-production stockpiles at the sharpest rate in seven months, citing robust sales volumes, reversing Novembers buildup. However, input inventories grew at the slowest pace in a year, reflecting cautious sentiment amid uncertain demand. Despite sluggish activity, hiring gained momentum. Manufacturing employment grew for the tenth consecutive month, with the fastest job creation rate in four months. Around 10 per cent of surveyed firms added staff, while less than 2 per cent cut jobs, according to S&P Global, which conducts the PMI surveys. Capacity pressures among manufacturers remained mild, limiting the urgency for new investments or workload expansion. While businesses anticipate output growth in 2025, their optimism is tempered by inflation and competitive pressures. HSBC economist Ines Lam noted the softer December data capped a strong but uneven 2024 for Indias manufacturing sector. Slower growth in new orders suggests a weaker outlook for future production, though the rise in export orders offers a silver lining, she said. As Indias manufacturing sector navigates these headwinds, policymakers and businesses alike must brace for sustained challenges in the coming months. (KNN Bureau) 40487 https://knnindia.co.in/news/newsdetails/sectors/indias-manufacturing-sector-hits-12-month-low-in-december 2025-01-02 16:32:00 knnindia.co.in India’s Manufacturing Sector Hits 12-Month Low in December