With the sharp upturn in industrial output in India, the manufacturing PMI scaled a new high of 57.8 in the month of December in 26 months.. (Representational image: AFP)

New Delhi: With the sharp upturn in industrial output in India, the manufacturing PMI scaled a new high of 57.8 in the month of December in 26 months. However, the country witnessed an overall demand with conducive of growth and manufacturers finished 2022 on a solid note  as business conditions improved at the fastest rate in over two years, a private survey showed on Monday.

A reading above 50 indicates expansion in activity, while a sub-50 print is a sign of contraction. This is the 18th consecutive 50-plus print for the manufacturing PMI. At 57.8, the December manufacturing PMI print is not only the highest in 26 months but also it has now been above 50 for one-and-a-half years. The PMI average for the third fiscal quarter was 56.3 which was the highest recorded since one year ago.

According to the survey conducted by S&P Global India Manufacturing Purchasing Managers’ Index (PMI), India's manufacturing sector activity continued to expand in December, with the S&P Global Purchasing Managers' Index (PMI) rising to 57.8 from 55.7 in November, production stepped up to the greatest extent since November 2021. "The rate of inflation for selling prices outpaced that seen for input costs in December this has happened for the first time in close to two-and-a-half years," it showed.

In some instances, panellists indicated that advertising, product diversification and favourable economic conditions supported sales. "International demand for Indian goods also improved, but did so to a lesser extent than in November. Overall, new orders from abroad rose at the slowest pace in five months
as several companies reportedly struggled to secure new work from key export markets," the survey showed.

"Demand strength took centre stage among the reasons provided by firms for improvements in many measures. Additional materials were purchased and extra workers hired as companies sought to supplement production and maintain healthy levels of inventories. Input stocks rose at a near-record pace," said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.

"While some may question the resilience of the Indian manufacturing industry in 2023 amid a deteriorating outlook for the global economy, manufacturers were strongly confident in their ability to lift production from present levels," Lima added