The increase in export orders is particularly encouraging. As global markets recover and demand increases, Indian manufacturers are well-positioned to take advantage of these opportunities.As we step into 2025, it’s time to reflect on how Indian manufacturing has performed over the past year and what recent trends mean for the future. Although the Purchasing Managers’ Index (PMI) in December 2024 fell to the lowest reading of the year at 56.4, the sector has shown remarkable resilience, as reflected in solid growth numbers above the long-term average of 54.1. showed.
Resilience as we approach 2024
Although the PMI has fallen slightly from 56.5 in November 2024, it still indicates growth. HSBC data shows production, new orders and inventory cuts are slowing, albeit at a modest pace. HSBC economist Ines Lam said the slowest rate of expansion in new orders this year suggested potential production challenges ahead.
However, there were also positive developments. New export orders are increasing at the fastest pace since July 2024, suggesting that international demand for India’s industrial products remains strong. A slight easing of input cost pressures also provided some relief to manufacturers, who had been plagued by steep cost increases throughout the year.
The slight decline in December should not overshadow the real results in 2024. India’s manufacturing industry has been a beacon of resilience, weathering competitive pressures and price fluctuations. Continued growth, albeit at a slower pace, is a testament to the sector’s strength.
The increase in export orders is particularly encouraging. As global markets recover and demand increases, Indian manufacturers are well-positioned to take advantage of these opportunities. Easing input cost pressures will further strengthen the sector’s competitiveness and allow companies to manage profit margins more effectively.
Employment trends also show a positive outlook. The pace of job creation in the sector was the fastest in four months, with 10% of companies expanding their workforce. This continued optimism is critical to the sector’s long-term growth, as a skilled and motivated workforce is key to driving innovation and productivity.
Looking to the future
Looking ahead to 2025, several factors will shape the future path of Indian manufacturing.
Global demand: Continued growth in export orders is a positive sign. Strengthening international trade relations and tapping into emerging markets will play an important role in this area. Cost control: Although input costs have fallen, manufacturers must remain vigilant and continue to focus on efficiency and innovation to remain competitive. Technological advances: Investing in cutting-edge technology and automation should be a priority for large manufacturers as well as small and medium-sized businesses to remain competitive and foster growth. Government support: The role of government policy and infrastructure development cannot be overstated. Continued support in these areas will help foster an environment conducive to manufacturing growth. In conclusion, December 2024 may have ended on a calm note, but the overall story for Indian manufacturing remains one of optimism and resilience. By leveraging export opportunities, effectively managing costs and capitalizing on technological advances, the sector is poised to overcome challenges and seize new opportunities. The dynamism and adaptability of India’s manufacturing industry has laid a strong foundation for sustained growth. As we look to 2025, these strengths will continue to propel the sector forward and ensure that it remains a key driver of the country’s economic development.
