Export-led output drove manufacturing sector growth in January, with the Purchasing Managers’ Index (PMI) for the month surging to a six-month high of 57.7, the survey report released by S&P Global said on Monday. While job creation was good, input prices were down, though price realisation from output was better.

“Domestic and export demand were both strong, supporting growth in new orders,” said Pranjul Bhandari, Chief India Economist at HSBC. The index is prepared based on the responses from purchasing managers of 400 companies. An index above 50 points to an expansion, while below 50 indicates a contraction.

Robust sales gains and upbeat forecasts drove recruitment at the start of the fourth fiscal quarter. Employment expanded by the greatest extent in nearly 20 years of data collection. “The employment PMI suggested robust job creation in the manufacturing industry, as the index increased to its highest level since the series was created,” said Bhandari. Underlying data showed that strong job creation in recent months enabled companies to stay on top of their workloads.

“Another positive was easing of prices. Input cost inflation eased for a second month, relieving pressure on manufacturers to raise final output prices,” Bhandari said. According to the survey report, input costs increased in January amid reports of greater outlays on freight, labour and materials. However, the rate of inflation was modest overall, and the weakest since February 2024.

Prices charged for Indian goods rose at the slowest pace in four months during January, albeit one that was marked and above the long-run series average. Survey participants said hikes to selling prices were supported by positive client appetite.

Firms were successful in their efforts to lift inventories as suppliers were able to deliver materials in a timely manner. Vendor performance improved by the greatest extent in eight months, while accumulation in input stocks was the fastest since October 2024.   The survey report found that capacity pressures among manufacturers in India remained mild, as indicated by the fractional increase in outstanding business volumes.

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