India's March factory activity expands at its fastest pace in eight months

India’s manufacturing activity expanded at its fastest pace in eight months in March, rebounding from a 14-month low recorded in February, driven by buoyant demand that boosted company sales, according to a private survey. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 58.1 in March from 56.3 in February. A PMI reading above 50 indicates expansion, while a figure below 50 signals contraction. March marked the 45th consecutive month of expansion in manufacturing activity. Despite a mild slowdown in international orders, strong domestic demand prompted companies to utilise existing inventories, leading to the sharpest decline in finished goods stocks since January 2022. To counter the decline, firms accelerated input purchases at the fastest rate in seven months. The largest contributor to the PMI increase was the new orders index, which reached 61.5, an eight-month high. Companies attributed the growth to improved customer interest, favourable demand conditions, and successful marketing efforts. Although new export orders increased, their growth rate fell to a three-month low, with sales expanding in Asia, Europe, and West Asia. Meanwhile, Indian manufacturers expanded their workforce, though slower in March.