India's Manufacturing PMI slips to 56.4, ending 2024 on a Soft Note

India's manufacturing industry concluded 2024 on a weaker note, with the PMI for December decreasing to 56.4, the lowest figure recorded for the year. As per HSBC data, the number, which dipped slightly from November's 56.5 and fell short of the 'flash' estimate of 57.4, nevertheless indicated strong growth as it stayed above the long-term average of 54.1.

The data indicated signs of moderation in crucial aspects, such as production, new orders, and inventories. India's manufacturing industry demonstrated consistent strength in December 2024, with employment increasing for the tenth straight month and achieving its quickest rate of job growth in four months, as reported by the HSBC India Manufacturing Purchasing Managers' Index (PMI).

Ines Lam, Economist, HSBC, said, "India's manufacturing activity ended a strong 2024 with a soft note amidst more signs of a slowing trend, albeit moderate, in the industrial sector. The rate of expansion in new orders was the slowest in the year, suggesting weaker growth in future production."

Lam added, "That said, there was some uplift in the growth of new export orders, which rose at the fastest pace since July. The rise in input prices eased slightly, wrapping up the year when Indian manufacturers felt the strain of sharp cost pressures."

Factory production and new orders grew at a slower pace, indicating heightened competition and pricing pressures. Although growth continued to be significant, December recorded the equal-slowest rate of expansion for 2024.