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Indian manufacturing activity witnessed faster growth in the month of April, amid a solid and faster improvement in operating conditions across the sector. Growth gathered momentum in the intermediate and capital goods segments, but there was a slowdown at consumer goods makers. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 54.7 in April from 54.0 in March.

As per the report, the retreat of COVID-19 restrictions continued to support demand. The rate of new order growth was marked, above trend and faster than that seen in March. Echoing the trend seen for new business, the rate of output growth quickened in April and outpaced its long-run average. Moreover, the latest rise in production took the current sequence of uninterrupted increases to ten months.

On the inflation front, firms signalled a further upturn in input costs during April, with chemical, electronic component, energy, metal, plastic and textile costs reportedly higher than in March. Increases were partly attributed to rising transportation fees and the war in Ukraine. The overall rate of inflation strengthened to a five-month high and outpaced its long-run trend.

Meanwhile, there was some improvement in business confidence at the start of fiscal year 2022/23. However, the overall degree of optimism remained subdued by historical standards. Some firms foresee further improvements in demand and economic conditions, while others noted that the year-ahead outlook was difficult to predict.