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India’s manufacturing activity slows down slightly with PMI score of 57.6 in May
Jun-02-2025

India’s manufacturing activity slowed down slightly in the month of May 2025 with HSBC India Manufacturing Purchasing Managers' Index (PMI) falling to three-month low of 57.6 from 58.2 in April 2025 amid softer growth of new orders and production. Though, the headline figure was nevertheless well above both the neutral mark of 50.0 and its long-run average of 54.1. 

Ongoing increases in new orders continued to support output, but rates of expansion receded to their weakest in three months. Monitored companies linked growth to healthy domestic and international demand, alongside successful marketing initiatives. The upturn was curbed by cost pressures, fierce competition and the India-Pakistan conflict.

Companies operating in India's manufacturing economy faced another monthly increase in purchasing prices. According to them, aluminium, cement, iron, leather, rubber and sand were the main sources of cost pressures. The overall rate of inflation was solid and the highest since November 2024. In addition to greater material costs, manufacturers also reported greater outlays on freight and labour. As a result of rising operating expenses and supported by strong demand, firms increased their selling prices in May.

However, new export orders rose at one of the strongest rates recorded in three years, with favourable demand from Asia, Europe, the Middle East and the US. Positive sales developments encouraged companies to purchase additional inputs for use in production processes. The pace of expansion was sharp and eased only marginally since April. Sustained job creation enabled manufacturers to stay on top of their workloads in May. Outstanding business volumes was unchanged, ending a six-month period of accumulation.

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