HSBC India Manufacturing PMI Falls To 57.6 In May

India’s manufacturing sector lost momentum in May 2025, registering its weakest growth in three months as inflationary pressures, moderating demand, and geopolitical tensions weighed on factory activity, according to the HSBC India Manufacturing Purchasing Managers’ Index (PMI).

PMI Falls to 57.6 in May

The seasonally adjusted HSBC India Manufacturing PMI dipped to 57.6 in May, down from 58.2 in April, marking the slowest improvement in operating conditions since February. Despite the decline, the reading remains well above the 50-mark, which indicates expansion.

S&P Global compiled the survey. It includes data from around 400 manufacturing firms. These firms come from different sectors and sizes.  Together, they represent a broad view of India’s industrial landscape.

Cost Pressures and Geopolitical Uncertainty Curb Growth

While manufacturers continued to report robust demand from both domestic and international markets, growth was hindered by rising input costs, stiff competition. Ongoing issues like the India-Pakistan conflict also got in the way.

According to the survey, higher costs for raw materials, freight, and labour contributed to increased operating expenses. Consequently, many firms passed on these costs to customers through higher selling prices.

Job Creation Hits Record High

A key bright spot in the report was employment. Companies ramped up hiring in May, with the rate of job creation reaching a new series record. Notably, permanent roles outpaced short-term hires among firms reporting increased headcount.

The ongoing recruitment drive helped manufacturers manage workloads effectively, despite the broader slowdown in output and new orders.

Export Orders Surge

May also saw one of the strongest rises in new export orders in three years, with demand strengthening across major regions including Asia, Europe, the Middle East, and the US. Firms attributed this rise to improved global demand and effective marketing strategies.

Business Sentiment Remains Strong

Despite the moderation in growth, Indian manufacturers remain optimistic. Business confidence for the next 12 months remains high, with firms expecting output to rise, underpinned by strong demand fundamentals.

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