Manufacturing PMI: The Manufacturing Purchasing Managers’ Index (PMI) is a key economic indicator that assesses the business activity within a country’s manufacturing sector.
Manufacturing PMI in May: India’s manufacturing sector experienced a slight moderation in growth during May 2025. The HSBC India Manufacturing Purchasing Managers’ Index (PMI) decreased from 58.2 in April to 57.6 in May. This marks the lowest level recorded since February. However, the index remains significantly above the neutral threshold of 50.0 and the long-term average of 54.1, indicating that the sector’s growth momentum remains robust.
Strong Domestic and Foreign Demand Continue to Support Growth:
The manufacturing sector’s expansion in May was underpinned by strong demand both domestically and internationally, successful marketing initiatives, and a significant increase in export orders. Companies reported robust demand from key global markets including Asia, Europe, West Asia, and the US. Export orders witnessed their fastest growth rate in three years. However, survey respondents attributed the slight slowdown in May to intense competition, rising costs, and ongoing tensions between India and Pakistan, noting that these factors had a dampening effect on business sentiment.
Record Employment Growth:
May saw a historic surge in employment within the manufacturing sector. This represented the fastest pace of job creation in the history of the PMI survey. Companies prioritized permanent hires over temporary positions. This sustained recruitment drive helped businesses manage their workload more effectively and brought an end to the backlog issues that had persisted for six consecutive months.
Rising Costs and Inflationary Pressures:
Cost pressures intensified in May, with input inflation reaching a six-month high. The primary drivers for this increase were rising prices of raw materials such as aluminum, cement, iron, leather, rubber, and sand, as well as higher freight and labor costs. To protect their profit margins, companies implemented one of the sharpest increases in product prices seen in the past 11 years. Despite these inflationary pressures, Indian manufacturers remain optimistic, expressing confidence in increasing production over the coming year, primarily driven by advertising efforts and growing customer inquiries.
What is the Manufacturing PMI?
The Manufacturing Purchasing Managers’ Index (PMI) is a crucial economic indicator that gauges the business activity of a nation’s manufacturing sector. The survey compiles information from purchasing managers who monitor key operational aspects such as production, new orders, employment levels, supplier performance, and inventory.