Rates of growth remained substantial, however, underpinning further expansions in buying levels and employment. Meanwhile, cost pressures receded and were mild, but charge inflation remained historically high.

At 56.4 in December, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) was at a 12-month low and indicated a weaker improvement in operating conditions. The headline figure was down from 56.5 in November, but remained above its long-run average of 54.1 thereby signalling a robust rate of growth.

Firms continued to report that advertising and positive client appetite supported sales. The latest expansion was sharp, though the joint-slowest in a year (equal to September). Qualitative data suggested that growth was hampered by competition and price pressures.

Similarly, factory output rose at a substantial pace that was nevertheless the slowest in 2024. Favourable demand was identified as the main determinant of production growth.

Ongoing improvements in new work intakes prompted manufacturing companies in India to purchase additional inputs for use in production processes.

With regards to input inventories, purchasing growth and shorter lead times underpinned another monthly increase. On the other hand, there was a renewed decline is postproduction inventories.

Capacity pressures among Indian manufacturers remained mild, as seen by another marginal increase in work either pending completion or not-yet-started.

Looking to 2025, Indian manufacturers were confident of a rise in output. Optimism reflected advertising, investment and expectation of favorable demand. Sentiment was nevertheless curbed by concerns around inflation and competitive pressures.