India’s Manufacturing Growth Slows in December 2024
India’s manufacturing sector experienced a slowdown in December 2024, as indicated by the latest Purchasing Managers’ Index (PMI) data. The PMI fell to 56.4 from 58.6 in November, signaling a moderation in growth despite remaining above the crucial 50-mark that separates expansion from contraction.
Key Highlights from the PMI Report
The decline in the PMI reflects easing output and new orders growth, driven by weakening global demand and rising input costs. “The December reading highlights a cooling of momentum, though manufacturing activities continue to expand,” stated a report accompanying the data release.
Domestic demand remained relatively robust, contributing positively to the sector. However, export orders faced pressure as global economic challenges, including inflationary trends and geopolitical uncertainties, weighed on international trade.
Inflation and Employment Trends
The PMI data also revealed an uptick in input cost inflation, with manufacturers reporting higher expenses related to raw materials and logistics. Despite these pressures, employment levels in the sector showed resilience, with companies continuing to hire to meet domestic demand.
Manufacturers expressed concerns about potential slowdowns in the coming months, with many adopting a cautious approach toward production and inventory management.
Outlook for 2025
Economists remain optimistic about India’s manufacturing sector, citing strong domestic fundamentals and policy support. However, they also caution that external challenges could dampen the pace of recovery. The Reserve Bank of India (RBI) may closely monitor these trends as it formulates monetary policy for the upcoming quarter.
The manufacturing PMI’s decline underscores the need for strategic measures to sustain industrial growth amidst a challenging global environment. Policymakers and industry leaders are expected to address these concerns to ensure steady economic progress in 2025.
