India Manufacturing PMI Revised Lower

India's HSBC Manufacturing PMI fell to 54.5 in June 2026, a three-month low, down from 55.0 in May, preliminary estimates showed. Growth in manufacturing activity slowed as demand softened and cost pressures persisted, restricting output expansion. New orders continued to rise but at a weaker pace, with firms citing competitive pressures and subdued domestic and export demand. Export orders grew at the slowest pace since March 2023. Employment rose only marginally, marking the weakest hiring pace in six months, as manufacturers adjusted staffing to softer demand conditions. Backlogs of work were broadly stable. Purchasing activity also increased at its slowest pace in two-and-a-half years, prompting a softer increase in stocks of purchases and an outright decline in inventories of finished products. On prices, cost pressures remained elevated. Business confidence remained positive but weakened to its lowest level in close to four years.

India’s HSBC Manufacturing PMI rose to 55.0 in May 2026, a three-month high, from 54.7 in April, and was revised higher from the flash estimate of 54.3. Growth was driven by faster gains in new orders, output and purchasing, led by domestic demand as exports softened. Sales were supported by intermediate and capital goods amid infrastructure spending and new business wins. Manufacturers increased input buying on stockpiling needs, while pre-production inventories rose as supply conditions improved and delivery times shortened. Finished goods stocks also rose to an 11-year high as supply outpaced demand. Employment rose more slowly, while backlogs edged higher. On prices, input costs climbed sharply on higher energy, fuel, materials and transport costs linked to geopolitical tensions. Output price inflation remained more moderate as firms limited pass-through. Business confidence stayed positive, supported by strong order pipelines and easing cost expectations.

India’s HSBC Manufacturing PMI fell to 54.3 in May 2026 from 54.7 in April, marking the second-weakest improvement in factory conditions in nearly four years, ahead only of the level seen in March. Output growth eased to the second-softest expansion since mid-2022, while new orders rose at a slower pace as firms cited competitive pressures, softer demand conditions, travel disruptions, and the ongoing war in the Middle East as factors weighing on sales. Export demand also weakened, with international sales recording the second-slowest increase since September 2024. Meanwhile, input cost inflation accelerated to its highest level since July 2022, driven by higher prices for energy, fuel, metals, plastics, rubber, and transportation. However, manufacturers raised selling prices at a slower pace as firms cautiously passed on higher costs to clients. Hiring growth softened from April but remained solid, while firms continued to build inventories and increase purchasing activity.