Amid high-cost pressure, India’s manufacturing sector performed better in April as the Purchasing Managers’ Index (PMI) rose to 54.7, S&P Global reported on Monday.
PMI in March was 53.9. The index is based on responses from purchasing managers of 400 companies. An index above 50 means expansion, while an index below 50 means contraction.
Economist flags inflationary pressures
Pranjul Bhandari, Chief India Economist at HSBC, acknowledged the rise in PMI but also said that it is “still marking the second-slowest improvement in operating conditions in nearly four years. Further, spillovers from the Middle East conflict are becoming more evident, particularly through inflation: input costs increased at the fastest pace since August 2022, and output prices rose at the quickest rate in six months. Even so, “output, new orders (including exports) and employment all grew moderately, pointing to continued resilience in India’s manufacturing sector,” she said.
Input costs surge amid global factors
According to S&P Global, amid reports of higher prices for aluminium, chemicals, electrical components, fuel, leather, petroleum products and rubber, average cost burdens rose further in April. Panellists often attributed hikes to the Middle East. Subsequently, producers of goods raised their prices to the greatest extent in six months, it said.
Hiring activity strengthens
On the new job opportunities, S&P Global said that despite only a marginal increase in outstanding business volumes, manufacturers recruited additional workers at the start of the first fiscal quarter. Moreover, the rate of job creation was the highest in ten months. Hiring growth reflected expansion plans, according to anecdotal evidence.
Mixed trends across sectors and inventories
The consumer goods sector was the only category to see a slowdown in cost inflation, but the rate of increase here nevertheless surpassed that seen elsewhere. This sub-sector also topped the rankings for output charge inflation. Concurrently, input inventories rose at the slowest pace in nearly 5 years. Growth was constrained by attempts by some firms to keep stocks lean amid subdued sales performance, qualitative data showed. Finished goods inventories increased for the first time in six months, but the rate of accumulation was slight overall.
Published on May 4, 2026