India's manufacturing activity remained robust in May and rose to a 31-month high on the back of firm demand, improvement in supply chains and stronger increase in new orders, according to a survey.
The manufacturing sector has shown the highest improvement since October 2020, according to the S&P Global India Manufacturing Purchasing Managers' Index (PMI), which increased from 57.2 in April to 58.7 in May. The 50-point mark separates expansion from contraction. The survey is compiled from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.
The manufacturing sector has improved since the lifting of curbs imposed to prevent the spread of the coronavirus. The sector grew 4. 5% in the fourth quarter of 2022–2023, following a 1. 4% contraction in the third quarter, as per recent data.
The survey results showed that a surge in sales paved the way for stronger increases in production, employment and quantities of purchases. With supply chain conditions improving further, companies noted a record accumulation in input inventories, it said.
Out of the five PMI subcomponents, stocks of purchases showed notable vigour, increasing at an unprecedented pace in May.