India’s manufacturing PMI slips to 3-month low in May, employment hits record high

India’s manufacturing sector remained in expansion mode in May 2025, although momentum softened compared to April, according to the HSBC India Manufacturing Purchasing Managers’ Index (PMI) released by S&P Global. The PMI dipped to 57.6 in May from 58.2 in April — a three-month low — signaling a slower pace of growth in output and new orders. Despite the decline, the reading remained well above the neutral 50-mark and its long-run average of 54.1.

According to the HSBC report, while domestic and international demand continued to support business activity, cost inflation, intense market competition, and concerns surrounding the India-Pakistan conflict acted as drags on growth. Manufacturers reported notable increases in selling prices, driven by higher input costs — the steepest seen in nearly a year.

One standout in the data was employment. May witnessed the highest rate of job creation since the survey began, with permanent roles rising significantly. Firms also ramped up their input purchases to meet future demand, even as inventory of finished goods fell for the sixth consecutive month.

New export orders rose strongly, with firms citing better demand from the US, Europe, Asia, and the Middle East. Despite the challenges, sentiment for future output remained robust, driven by marketing efforts and fresh customer enquiries.

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The information provided is for informational purposes only and should not be considered financial or investment advice. Economic indicators like PMI are subject to revisions and contextual interpretation. Please consult official sources or financial experts before making business decisions.

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