IGI Logo

Indicating the second-best improvement in the health of the sector for nearly three years, India's manufacturing sector activity showed a robust growth in the month of August, as new orders and output increased at the quickest rates. According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) jumped to 58.6 in August, 2023 from 57.7 in July. 

The report noted that a healthy demand environment and favourable market conditions encouraged Indian manufacturers to step up production. Output rose for the twenty-sixth successive month and to the greatest extent in just under three years. To keep production lines running smoothly, manufacturers purchased additional raw materials and semi-finished items in August. Buying levels rose sharply and at one of the fastest rates seen in over 12 years.

On the price front, cost inflationary pressures accelerated but there was a slower uptick in selling charges. August data showed reduced capacity pressures at Indian manufacturers as outstanding business volumes were broadly stable. Concurrently, inventories of finished items fell amid the fulfillment or rising demand. The pace of stock depletion was moderate and softened since July.

Meanwhile, upward revisions to marketing budgets, better customer relations, demand strength and a healthy number of client enquiries underpinned upbeat forecasts among manufacturers regarding the year-ahead outlook for production. Although historically elevated, the overall level of positive sentiment slipped to a three-month low due to inflation concerns.