India’s manufacturing sector gained further momentum in August, with strong demand driving factory orders and output to new highs. The seasonally adjusted HSBC India Manufacturing PMI rose to 59.3 from 59.1 in July, marking the highest reading since February 2008. A PMI above 50 indicates expansion, while below 50 reflects contraction.
The surge was led by solid growth in new orders and production, prompting firms to boost input purchases and expand their workforce. HSBC’s chief India economist Pranjul Bhandari attributed the growth to a sharp rise in production but noted that higher US tariffs on Indian goods may have dampened export demand due to buyer uncertainty.
The output sub-index grew at its fastest pace since late 2020, while new orders continued their robust momentum from July, driven by strong domestic demand and marketing efforts. Export growth slowed, posting the weakest rise in five months, yet remained historically strong.
Despite slower job growth, employment rose for the 18th consecutive month. Input and output costs increased, but firms managed to pass on higher costs to customers. Purchasing activity also jumped, as manufacturers rebuilt inventories amid improving business confidence.
