May’s manufacturing PMI scales a 31-month high: S&P Global survey

Overall business confidence levels about growth prospects continued to improve hitting a fivemonth high; output levels were the highest in 28 months and pressure on capacities compelled firms to accelerate fresh hiring to a sixmonth high

The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) surged to a 31month high of 58.7 in May, with factory orders rising at the fastest clip since January 2021 and producers accumulating inputs at an unprecedented pace thanks to lower costs.

The index stood at 57.2 in April. The latest reading reflects a substantial improvement in operating conditions with order books growing for the 23rd consecutive month, bolstered further by export deals clocking the swiftest rise in six months.

Output levels were the highest in 28 months and the pressure on capacities drove firms to lift fresh hiring to a sixmonth high.

While input costs “remained historically mild”, S&P Global said its survey of about 400 firms showed that producers raised selling prices at “a solid and quicker rate in May” that was the highest in a year. “Sustained increases in input costs and a supportive demand environment led them to lift their charges,” S&P Global said.

Overall business confidence about growth continued to improve, hitting a fivemonth high, with firms citing publicity and demand resilience as factors spurring the optimism.

“Heightened demand and previously absorbed cost burdens translated into a stronger upward revision to selling charges,” noted Pollyanna De Lima, economics associate director at S&P Global Market Intelligence. “Demanddriven inflation is not inherently negative, but could erode purchasing power, create challenges for the economy and open the door for more interest rate hikes,” she cautioned.